TLA with KIA Corp: SECP drops winding-up proceedings against Dewan Motors
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has dropped the winding-up proceedings initiated against Dewan Farooque Motors Limited after the company signed a Technical License Agreement (TLA) with KIA Corporation for the assembly/manufacturing of commercial vehicles.
According to an order of the SECP’s Adjudication Department, keeping in view the tangible measures taken by the company for the revival of its operations including but not limited to TLA signed with KIA Corporation and auditors’ certificate, the SECP has observed that the ground of the notice, ie, suspension of business of the company has been duly addressed.
The adjudication authorities of the SECP find no reason to continue the winding up proceedings initiated against the Company through the notice and hereby drop the same with no further action, SECP Adjudication department added.
The said order shall dispose of the proceedings initiated in the matter of Show Cause Notice dated August 18, 2022 (the SCN) issued to the said company and its board of directors.
The facts leading to this case, briefly stated, are that the Additional Registrar of Companies, Company Registration Office (CRO) Karachi approached the Commission for grant of sanction in terms of clause (m) of section 301 read with clause (b) of section 304 of the Companies Act to present a petition before the High Court for winding up of the Company on the grounds that the company has suspended its operations since February 2014.
In response to the notice, the company has submitted its detailed reply to the SECP addressing all issues raised by the commission.
The SECP has gone through the facts of the case, record available with the Commission along with written and verbal submission made during hearing proceedings. In this context, it is hereby pointed out that the operations of the Company were suspended since February 2014. The company however has recently entered into a Technical License Agreement (TLA) with KIA Corporation for assembly/manufacturing of special purpose commercial vehicle. The company in this regard, also made necessary announcement on the Pakistan Stock Exchange (PSX).
Furthermore, the company vide its letter has addressed to Chief Regulatory Officer of PSX, provided the auditors certificate wherein the auditor states that the Company has recently undergone certain steps, including execution of TLA with KIA Corporation and various measures in order to be operational and enable itself for manufacturing of vehicles. Besides, the Company vide letter dated December 27, 2022 also provided the road map for revival of operations of the company.
In view of the aforesaid submissions, tangible measures taken by the company for revival of its operations including but not limited to TLA signed with KIA Corporation and auditors’ certificate; the head of the Adjudication Department has observed that the ground of the show cause notice i.e. suspension of business of the company has been duly addressed. I, therefore, find no reason to continue the winding up proceedings initiated against the company through the SCN and hereby drop the same with no further action, the SECP order added.
Copyright Business Recorder, 2022
Comments
Comments are closed.