This order will dispose of the proceedings initiated under Section 224(4) of the Companies Ordinance, 1984 ("Ordinance") by the Securities and Exchange Commission of Pakistan ("Commission") through Show Cause No.S.M(B.0)C.0.222/4(4508)11 dated 20/02/2012 ("Notice") issued to Mrs. Fatima Fazal ("Respondent"), Director of Reliance Weaving Mills Limited ("Issuer Company").
2. The facts of the matter leading up to aforesaid Notice are that the Issuer Company is a public listed company and the Respondent being its Director was required to file return of beneficial ownership on Form 32, with this Commission for the changes taken place in her beneficial ownership during the period from March 2005 to December 2006 ("Period") within the period stipulated under Section 222 of the Ordinance.
3. Section 222(2)(c) of the Ordinance stipulates the period within which the Form 31 is to be submitted as under:- "where there is any change in the position or interest as aforesaid including a change in the beneficial ownership of any equity, security, within fifteen days of such change".
4. The Respondent was, therefore, asked vide letter dated 21/02/2012 to file Form 32 for the said changes in beneficial ownership. In response to the said letter, the Respondent filed two Form-32 with this Commission, for the following changes in beneficial ownership:- {{TABLE}} Sr. No. Date No. of Shares Nature of Change Return Received on Delay in Days 1 15/03/2005 18,750 Bonus 07/03/2012 2,529 2 05/12/2006 28,125 Bonus 07/03/2012 1,903 {{TABLE}}
5. The aforesaid changes in beneficial ownership were reported to the Commission with delay ranges from 1,903 days to 2,529 days, in contravention of Section 222(2)(c) of the Ordinance, which prima facie attract penal provisions contain in Section 224(4) of the Ordinance, which provides as under:- "Whoever knowingly and wilfully contravenes or otherwise fails to comply with any provision of section 222, section 223 or section 224 shall be liable to a fine which may extend to thirty thousand rupees and in the case of a continuing contravention, noncompliance or default to a further fine which may extend to one thousand rupees for every day after the first during which such contravention, non-compliance or default continues"
6. The Commission took cognizance of the aforesaid defaults and issued Notice to the Respondent under Section 224(4) of the Ordinance, calling upon her to explain through written reply alongwith documentary evidence, if any as to why action may not be taken against her pursuant to Section 224(4) of the Ordinance, for aforesaid contraventions of Section 222 of the Ordinance.
7. Furthermore, in order to provide an opportunity of being heard in person, hearing in the matter was fixed for 30/11/2012 at the Commission's Head Office, Islamabad, which on the request of the Respondent was adjourned and rescheduled for 07/02/2013. On the said date, Mr. Basharat Hashmi, Company Secretary of Air One (Pvt.) Limited ("Authorized Representative") appeared on behalf of the Respondent. The submissions made on behalf of the Respondent by the Authorized Representatives during the course of hearing be summarized as under:- a) The Respondent being a lady is not familiar with the requirements of the under reference law. b) The Form-32, for receipt of 28,125 bonus shares was filed timely with the Company Registration Office, Multan. c) The filing of the returns in question with the Commission was unconsciously overlooked. d) The Authorized Representative requested to condone the default. e) The Authorized Representative ensured that the Respondent will comply with the requirement of Section 222 of the Ordinance, within the prescribed time period in future.
8. I have considered the aforesaid submissions made on behalf of the Respondent. The Respondent has admitted the default of late filing of the returns of beneficial ownership with the contention that said default was not committed willfully and knowingly. The Respondent has assured for timely filing of the returns of beneficial ownership in future and requested to condone the default in question. Considering the submissions made by the Respondent, I intend to agree with the contention of the Respondent and of the view that the late filing of the under reference returns of beneficial ownership may not be willful. Therefore, a lenient view of the matter has been taken and the Respondent is hereby strictly warned to ensure timely compliance of Section 222 of the Ordinance in future.
9. This order is issued without prejudice to any other action that the Commission/Registrar may initiate against the Respondent in accordance with the law on matter subsequently investigated or brought to the Notice of the Commission.