1. Under Proviso (b) of Section 309 Read with Section 30$ of the Companies Ordinance, 19843 This order shall dispose of proceedings initiated through show cause notice No. EMD1233/701/2008- 2066-72 dated February 10, 2009 under proviso (b.) of Section 309 read with Section 305 of the Companies Ordinance_ :934 COrdinance-) issued to Mg's. Progressive Insurance Company Limited (hereinafter referred to as the -the Company"). its directors including the Chief Executive or the Company. namety i. Mr. Abdul Ghani ii, Mr. Manzoor Hussain Jilani iii. Mr. Moved Asghar iv. Mr. Rashid Munir Ahmed v. Mr. 'Nagar Ahmed vi. Mr. Syed Saleem Ahmed vii. Mr. Nasir Munir Ahmed Ch ief Executive Clmirrnan D i rector Director Director Director Director The Additional Registrar of Corripiinies, Company Registration Off ce..KaraChi ("Registrar") vide his letter dared February 2., 2009 sought sanction of the Commission in terms of proviso (b) of Section 309 of the Ordinance to present a petition before the Honourable High Court of Siriclh for winding up of the Company in public interest on the following grounds:- * The business of the Company is suspended since Year 2006. No proper books or accounts are being maintained and kept by the Company. The Company is conducting its business in a manner oppressive to its members and minority shareholders.
2. Upon receiving the aforesaid request from the Registrar, before proceeding further, a show cause notice dated February 10. 2009 was served on all directors including the Chief Executive of the Company under Section 309(0 read with Section 305 of the Ordinance. In the show cause notice it was stated that during the proceedings of inspection of the Compon!. under Section 231 of the Ordinance. held from December 29 to December 31. ZOOS, the Company failed to provide the inspection team with any hooks of accounts which confirms the fact that books of accounts were not being maintainecl..Further, Company has suspended its business for more than one year. Since these circumstances call for winding of the Company by Court under clauses (c) and (I) of Section 305 of the Ordinance, the Chief Executive and all directors of the Company were given an opportunity to explain in writing as to why sanction in terms of proviso (b) of Section 309 of the Ordinance may not be granted to the Registrar to present a petition for winding up of the Company.
4. Replying to show cause notice. the Company vide its letter dated February 16, 2009 informed that Mr, Sabur Reitman. major sponsor of the Comparby, was approached for seeking explanation to queries raised in the show cause notice. He had been in England for having his medical treatment, His final medical check up was due on February 27. 2009. lie was willing and desirous to represent the Company himself' before the Commission and for this purpose he was returning hack to the country by end of lst week of March 2009. Therefore, the Company requested for grant of extension in time for submitting reply to show cause notice till second week of March 2009.
3. 5, In order to provide an opportunity to the Chief Executive and Directors of the Company or their authorized representatives for tippearing in person to explain the circumstance's which let to non- compliances with said provisions of the Ordinance_ a number to hearings in this truster were scheduled on dated 1 lib March 2009. and 19111 March 2009 but even" time it was adjourned on the Company's request.
4. 6 The final hearing of the case was fixed for April 1. 2009 and accordingly, hearing notices were sent to the Chief Executive and directors of the Company wherein it was mentioned that this was final hearing opportunity and if nci one appears therein on behalf of the Company, the matter would be decided ex-parte on the merits of the case. However_ none of the directors or their authorized representative appeared in the final hearing of the case_ 7 .it has been observed that directors of the Company have not onN missed out three consecutive opportunities of appearing in hearings of the case but ihe' also failed to submit written reply to answer the queries raised in show cause notice. i-lowever, the Compri)? kept on seeking Further extension in time to defer show cause proceedings for indefinite. period. The Company should have deputed an authorized representative to participate in proceedings of the lwarinEs of the case rather than seeking adjournment for 3 consecutive times for appearance of Mr. Sabur Reitman.
5. (the Major Shareholder) who was not present in the country.
6. 8 .To appreciate the facts of the ease_ it is important to look at profile of the Company. As per annual account of the Company for year ended December 31. 20(17_ the Company was incorporated as a public limited company in 1987 under the Ordinance and it was engaged in general insurance business. The registered office of the Company is eurrentll, situated at 504. Park Avenue, 24-A. Block-6. PEC HS, Shahrah-e-Faisal. Karachi. The a d accounts eonfirrn the fact that the busines-s of the Company remained suspended during the year as premium written during the year was reported as nil. The findings of aforesaid inspection as mentioned in foregoing Mara 3 confirmed that no hooks of accounts including, trial balances. accounting ledgers, cash book, bank book. bank statements, fixed assets register, member register. minutes book, and other relevant statutory corporate and accounting record and documents are not being, maintained and kept by the Company. Under these circumstances, the operations of the Company are being conducted in a mariner which is not fair to minority shareholders, This state of affairs call for winding of the Company by Court under clauses (c) and (Oa Section 305 of the Ordinance, which are reproduced as follows:- -305 A company may he wound up by the Court -(c) company does not conimOnce its business within a year from its incorporation, or suspends its busine.5N foiP ei whale _war: " ,fic the company is
(iv) run and fnanage'd by perse>ns who me.riniain {groper eind,true account's, or commit' fraud, misfeasance or malfeasance in relation to the company: or In addition to the above, the company has also made defaults in complying with the :various section of the Ordinance which includes section 86,, 193, 204A. 492 and Rule 8 of the Companies (issue of Capital) Rules 19-96 for which the Commission has initiated actions against the Company.
10. Moreover. due to continued default of Section 11 of the Insurance Ordinance, 2000, the CatrunissiOn in exercise of powers conferred under Section 63 of Insurance Ordinance issued direction dated June 24. 200S to the Company to cease entering, into new contraets of insurance unless it ensures compliance with provisions of Section 11 of insurance Ordinance within one month of direction. However. the Company has absolutely failed to comply with this direction of the Commission due to which its new business has been ceased with effect from.Juk 25, 200g.
7. Further. the undersigned is of the considered opinion based on state of affairs of the Company that there are no reasonable prospects for restoration of operations of the Comparir and to meet the statutory requirements of Companies Ordinance. [984 as well those of Insurance Ordinance, 2000 which renders the Company liable to be wound up .by Court under Section 305 of the Companies Ordinance I981.
8. 11, The. undersigned, therefore. in exercise of the powers conferred under Section 309 of the Ordinance hereby authorizes the Additional Registrar, Company Registration Office. Karachi to present a petition for winding up of Kis. Progressive Insurance Company Limited in Honorable High Court of Sindh,