The Securities and Exchange Commission of Pakistan (SECP) has issued 21 show cause notices to Modaraba companies during 2007-2008 to explain their position against the violations of Modaraba Ordinance, 1980 and Modaraba Rules, 1981.
Sources told Business Recorder on Wednesday that the show cause notices were issued under sections 19,20,21,23,32 of the Modaraba Companies (Floatation & Control) Ordinance, 1980 to Modaraba management companies during the period of July - June 2007-08 for the better implementation of Modaraba Law. During the period under review, Registrar (Modarabas) issued 21 show cause notices to Modaraba management companies, CEOs and the directors to explain their position against the violations of rules and regulations.
The data further revealed that orders under section 19, 20 and 32 of the Modaraba Ordinance were passed by the Registrar (Modarabas) to 12 Modaraba management companies mainly pertained to severe violations of Modaraba Ordinance Prudential Regulations, non-compliance of accounts, mismanagement of funds, non-compliance of reports and Code of Corporate Governance requirement.
Eight licenses of the Modaraba Management Companies were cancelled/registered through the Orders of the Registrar (Modarabas) during this period. These companies were registered as far back as 1990 and had not floated a Modaraba as required under the law. After affording an opportunity of being heard, the management did not express any intent to float a Modaraba, so the Registrar (Modarabas) issued Orders under Section 19 of the Modaraba Ordinance, 1980.
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