The Securities and Exchange Commission of Pakistan (SECP) has issued a show-cause notice to M/s Admore Gas (Private) Limited, Karachi, for paying Rs 39.45 million to its Chief Executive Officer Amir Waliuddin Chishti on the pretext of a partial settlement of his dues, instead of their stated intent to restructure overdue liabilities of financial institutions.
Qasim Wadud Advocates & Corporate Consultants on behalf of Anwar Masud Zaidi director of the company through its application of July 7, 2015 along with documents under section 263 of the Ordinance intimated that the company wanted to utilise cash generated through right shares (0.5 million of Rs 100 each amounting to Rs 50 million for restructuring of overdue liabilities of financial institutions.
The matter was inquired from the company in a letter on March 10, 2015 admitted that on August 06,-2014 the company made a payment of Rs 39.45 million to Chishti in partial discharge of his outstanding salaries, perquisites and advance of Rs 41.22 million, which remained unpaid by the Company since his appointment as the Company's chief executive officer in November 2012.
According to an SECP letter, the provision of section 492 of the Ordinance provides that whoever in any return, report, certificate balance sheet profit and loss account income and expenditure account, prospectus, offer of shares, books of accounts application, information or explanation required by or for the purposes of any of the provisions of this Ordinance or pursuant to an order or direction given under this Ordinance makes a statement which is false or incorrect in any material particular, or omits any material fact knowing it to be material, shall be punishable with a fine not exceeding five hundred thousand rupees.
"From the perusal of the response of the company, it appears that the company has misstated in the said circular as major portion of the funds which was received from the issuance of right shares was utilised for the payment of the outstanding salary of Company's chief executive officer instead of restructuring of overdue liabilities of the company with financial institutions," the letter added.
According to the SECP, prime facie, the default attracts a penal provision contained in section 492 of the Ordinance. SECP, in its letter written on November 17, 2015 said "you are called upon to show cause in writing within 14 days from the date of receipt of this notice, as to why penalties may not be imposed on the company and its defaulting officers including the chief executive and directors as laid down under the above said mandatory provisions of the Ordinance,".
SECP has also intimated to the concerned individuals that they must inform the Commission within seven days of the receipt of the notice, as to whether they would like to avail the opportunity of being heard in person or through duly appointed attorney so that a date of hearing may be fixed.
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