Plea bargain with NAB: SECP to be empowered to disqualify director of public interest company

The Securities and Exchange Commission of Pakistan (SECP) would be empowered to disqualify any director of a public interest company for a period up to five years including cases where the person has entered into a plea bargain arrangement with the National Accountability Bureau (NAB) or any other regulatory body. According to the second draft of the new Companies Act , in any of the circumstances stated hereunder, the Commission may make against a person a disqualification order to hold the office of a director of a public interest company for a period up to five years beginning from the date of order.
(a) Conviction of an offence in connection with the promotion, formation, management or liquidation of a company, or with the receivership or management of a company's property.
(b) Persistent default in relation to provisions of this Act requiring any return, account or other document to be filed with, delivered or sent, or notice of any matter to be given, to the Commission or the Registrar.
(c) A person has been a director of a company which became insolvent at any time (whether while he was a director or subsequently): Provided that order against any such person shall not be made after the end of the period of two years beginning with the day on which the company of which that person is or has been a director became insolvent.
(d) The business of the company in which he is or has been a director has been conducted to defraud its creditors, members or any other persons or for a fraudulent or unlawful purpose, or in a manner oppressive of any of its members or that the company was formed for any fraudulent or unlawful purpose; or (e) the person concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance, breach of trust or other misconduct towards the company or towards any of its member.
(f) The affairs of the company of which he is a director have been conducted in a manner which has deprived the shareholders thereof of a reasonable return.
(g) The person has been involved in convicted of allotment of shares of a company for inadequate consideration; or (h) the person is involved in illegal deposit taking.
(i) The person has been involved in the financial irregularities or malpractices in a company due to which the registration or licence of the company has been revoked or cancelled.
(j) The company of which he is a director has acted against the interests of the sovereignty and integrity of Pakistan, the security of the State, friendly relations with foreign States.
(k) The company of which he is a director refuse to act according to the requirements of the memorandum or articles or the provisions of this Act or fail to carry out the directions of the Commission given in the exercise of powers under this Act.
(l) The person is involved in convicted of insider trading or market manipulation practices.
(m) The person has entered into a plea bargain arrangement with the National Accountability Bureau or any other regulatory body.
(n) The person has been declared a defaulter by a securities exchange; (o) that it is expedient in the public interest so to do.
Where a disqualification order is made against a person who is already subject to such an order, the periods specified in those orders shall run concurrently. (3) An order under this section may be made by the Commission on its own motion or upon an application of a person. Before making an order the Commission shall afford the person concerned an opportunity of representation and of being heard. Any order made by the Commission under this section shall be without prejudice to the powers of the Commission to take such further action as it deems fit with regard to the person concerned, it added.