Towards Shareholder Democracy: SECP announces policy for proactive enforcement of corporate laws:
“ISLAMABAD, March 12: The Securities and Exchange Commission of Pakistan (SECP) has
issued a circular No. 7/2024 clarifying power of the Commission to call or direct the calling of
general meetings of the companies.
In the Circular issued on March 07, 2024, it is clarified that in case of default in holding a general meeting by the Company, the Commission is empowered under section 147 of the Companies Act, 2017 to direct holding of overdue general meetings on its own motion or on application of any director or member of the Company. The spirit of the provision of section 147 of the Act is to empower directors or members to compel the company to hold its overdue general meetings with the intervention of the Commission. Moreover, this provision has provided an alternate remedy when the normal machinery of the company management has failed.
The Commission has therefore, clarified through circular that an aggrieved member or director, in his individual capacity, may file an application to the Commission under section 147 of the Act which should be properly substantiated with proper justification along with documentary evidence. Applications filed by or on behalf of companies under section 147 of the Act shall not be considered by the Commission since a company cannot seek direction against itself.” Says a press release issued by the SECP.
Commenting on the new policy, Mr. Umar Ijaz Gilani, Advocate Supreme Court, said “the legal forum which gives meaning to the concept of “shareholder democracy” is the Gener al Meeting. Therefore, the SECP’s decision to proactively intervene for conduct of General Meetings is a welcome intervention. A more proactive approach for ensuring better corporate governance, especially in larger corporations is essential for economic growth in Pakistan.”
Link to the news shared by SECP with regard to the new policy:
https://www.linkedin.com/posts/secp_the-secp-has-issued-a-circular-no-72024-activity-7173275084483117056-viGd?utm_source=share&utm_medium=member_android.
Click to Download the Circularย
Circular-under-section-147-read-with-section-510-of-the-Companies-Act-2017
