1. April 27, 2005 Date of tinal ficarin Present; Date of Order Mr. Munawwar Ali, Chief Financial. Officer Mr. Muhammad Inn= Company Secretary December 8, 2005 No and date of show cause notice.
2. EMD/233/345/2002 dated March 04, 2005 Order This Order shall dispose off the proceedings initiated against M/s. Fiaseeb Wallas Sugar Mills Limited (hereinafter referred to as the "Company") and its Direttors for default made in complying with the provisions of Sub-section (1) of Section [58 of the Companies Ordinance, 1984 the "Ordinance").
3. The facts leading to this ease, briefly stated, are that in terms of the provisions of Subsection (1) of Section 158 of the Ordinance_ the Company was required to hold its Annual General Meeting (the "AGM") for the year ended September 30, 2004 on or before January 31,'(}05, The Company fixed the meeting for January 31. 2005, the agenda of which, among other ordinary business.. IncEuded eLeetion of directors. However, a day before the date of AGM_ Company published in the ncv.Spaper another notice for postponement or Al.iM in the novvapen. The reason given was that the majority shareholders (present mananzement) had requested for postponement of meeting as five nominees who were contesting for directorship Had acquired 39% shares of Company in violation of Listed Companies (Subslantial Acquisition of voting Share. And Takeover) Ordinance, 2002 (hereinafter referred as takeover laws). The present management of the Company also lodged compliant with Securities Market Division of the Commission. The intention of the present management for postponement of AGM was, prima. Facie, to stop the other persons from contesting the election of directors for which the Company violated the mandatory provision of Section 158 the Ordinance. Consequently. a show cause notice dated March 04, 2005 was served on the Company arid its Directors incIudin2 the Chief Executive calling upon them to show cause as to why penalties as provided under Sub-section (..:1) of Section [58 read with Section 476 of the Ordinance may not be imposed on them.
4. Hi response to the SCN, the Directors contended vide Letter dated March 18, 2005 that publication of notice of AGM and circulation of annual accounts is evidence that they had all the intention to hold AGM. However. After the announcement or AGM. Company received nomination of five other persons for election of directors, who sent the proxies to the tune of 31)% of total shareholding. The Company Secretary informed the directors that the shares have been acquired in violation of take- over laws. The majority shareholders then requested the Company to restrain the 5 new nominees from eontestirw. The t2 [CC LLCM Lo he held in AGM and to postpone the AGM till decision of SEC: on their complaint. Accordingly, !Lie Board of Directors in its meeting held on January 29. 2005 decided to postpone the AGM. Directors in their reply requested that they have no objection in holdinz of AGM. If the voting rights of irregular 39% shares are suspended by the Commission.
5. In order to give an opportunity of personal hearing, the case was fixed for April 27, 2005. On the date of hearing Mr. Munawwar ALi Chief- Financial Officer and Mr. Muhammad Imran companySecretary appeared on behalf of all the directors. They reiterated the same argument as were advanced earlier in their written reply dated March 18, 2005 to the Commission. He also added that AGM was postponed due to threats given by the other party and to avoid chances of light between the present management and the persons who illegally took-up the 1:,hareN. Mr. Munawar Ali.Contended that the management had all the intention to hold AGM for the year ended September 30. 2004 in time but it had to be cancelled due to circumstantial reasons. He accepted the default of Section 158 but requested to suspend disputed shares after Which the AGM can he held, 1 have given due consideration to the written submissions of the directors as well as the arguments advanced by the representatives of the Directors at the time of hearing but none Lhehi justified the default in the holding or AGM. The plea of the representative that the AGM could not he held due to request of majority shareholders rind the disputed takeover is not rational ground lbr not holding AGM. Section [58 requires the Company to hold AGM by January 31, 2005 or get an extension from Commission. Any violation of (]he takeover laws does not allow the Company and its Directors to postpone the AG and not to hold it within prescribed time limit. Moreover, the Commission is of the view that the complain( uls 4 Sc 5 read with section 21 and 25 of the takeover laws on the grounds that the acquirers have acted in concert by obtaining proxies is not tenable.
6. The Directors of the company are therefore_ responsible for not holding AGM with in the prescribed time limit. The default is. Therefore_ established, which attracts the Provisions of Sub-section (4) of Section 158 of the Ordinance. However, instead of iniposina the maximum line orRs. 50,0001- on every director and .a further rine of Rs, 2.000.'- per day for the continuous default.
1. In exercise of powers conferred upon me under Sub-section (4) of Section 158 read with Section 476 of the Ordinance, impose a line of Rs. 50,000/- (Rupees fifty thousand only) each on the Company, its (lief Executive and each of the Directors in the roi manner: - SING. Name P-enaIty 1 Mian Muhammad Illyas Mehraj, Chairman Rs. 50,000 ,-, , Min Waqas Riaz, Chief Executive Rs. 50,000 3 Mrs Shahzadi Ilyas, Director Rs. 50,000 4 Mrs Bano Mehrai Director Rs.
7. 50.000 5 Mrs Zainab Waqas, Director Rs. 50,000 6 Mst. Maiza Riaz. Director Rs. 50,000 7 Hafiz M. Irfan Hussain Bun, Director Rs. 50,000 8 Mis Haseeb Waqas Mills Limited Rs. 50.000 Total Rs. 400,01)0 6, The Company, its Chief Executive and Directors are hereby directed to deposit within thirty days o the date of receipt of this Order the aforesaid fines. Totaling to Rs.400,000 (Rupees four hundred thousand only) in the Commission's designated bank account No. 75010-6 maintained at Habib Bank Limited, Central Branch, 102/ 103, Upper Mall. Lahore or pay by a DD)/Pay order issued i]1 the name of Commission and send a copy of the receipted vouchers to the Commission for information and record. Failing which proceedings under the Land Revenue Act, 1%7 will be initiated which may result in the attachment and sale of their movable and immovable property. It should as o he noted that the said penalty is imposed on the Chief Executive and the Directors in their personal capacity, therefore, they are required to pay the said amounts from their personal resources,