ORDER:
1. The respondent Khawaja Muhammad Yousaf, Managing Director, Kohinoor Spinning Mills Limited, was asked by the Authority to show cause why action under section 1,9 of the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970 should not be taken against him for his failure to register himself with the Authority under section 16(1)(h) of the Ordinance. In response to this notice the respondent's son and Executive Director of the. undertaking Khawaja Javed attended.
2. Respondent's representative stated that the undertaking is a public limited company having a paid-up capital of Rs, 32,50,000 which is 50% of the capital sanctioned for issue by the Controller of Capital Issues. He also stated that the company was to be originally established in East Pakistan but due to the separation of that Wing the machinery was diverted to Pakistan and in consequence the Management suffered. It was contended that the Management did not have sufficient funds to set up the Mill and had to take rehabilitation loan of Rs, 11.25 lacs which was invested as equity of the undertaking. In addition the Equity Participation Fund invested in equity to the tune of Rs, 10 lacs.
3. It was contended that although the share-holding of the family which is headed by Khawaja Muhammad Yousaf is more than 50% of the present paid-up capital but if the total sanctioned capital is taken into consideration, the shares held by the individual fall below 50%. It was argued that the unsubscribed but sanctioned capital has been underwritten by the financial institutions and these institutions have a say in the affairs of the company and, therefore, the respondent does not exercise full control. Further that the respondent's family members are all grown up and have their independent points of view on different matters and it cannot, therefore, be assumed that he has a controlling influence over the share-holders. On a query it was stated that at present there are 10 Directors on the Board of which one Director represents Equity Participation Fund and the rest belong to one family headed by the respondent.
4. We have considered the facts of the case. We find that the subscribed capital is Rs, 32.5 lacs only and that is the capital which carries voting power. On the basis of section 2(2) of the Ordinance the respondent controls 69.23% of the voting power and as such was liable to get himself registered under section 16(1)(h). We do not agree with the contention that the under- writers exercise controlling influence in any manner nor does the argument, that family members being grown up have independent approach, help the respondent in view of the provisions of section 2(2) of the Ordinance. The respondent's obligation to register was thus very obvious and there is no evidence to show that failure to register was not wilful. For these reasons we hold that respondent has wilfully failed to get himself registered with the Authority. However, considering the circumstances of the case a penalty of Rs, 2,000 only is imposed. The penalty should be paid by 25th March, 1977. The individual is also directed to apply for registration within two weeks of the receipts of this order failing which further penal action will be taken.