Beneficial ownership: Companies not legally bound to respond to SECP notices

Companies are not legally bound to respond to the notices of the Securities and Exchange Commission of Pakistan (SECP), seeking the details of beneficial ownership of directors under the provisions of Companies Global Register of Beneficial Ownership of repealed Companies Ordinance, 2016. Sources told Business Recorder here on Friday that under the repealed Companies Ordinance, 2016, the SECP had issued notices to around 70,000 registered companies, including 63,000 local companies, seeking details of beneficial ownership of directors.
As the Senate has disapproved the said Ordinance, sources said that now the companies are not obliged to respond to the notices or further proceedings under the repealed Ordinance 2016. As far as registrations issued to the new companies under the repealed Ordinance 2016 are concerned, sources said, the registrations already issued would not be revoked. However, new registrations would be issued under the restored Companies Ordinance 1984.
Responding to different queries over legal status of actions taken under the Companies Ordinance 2016, sources said that the Senate disapproved the Companies Ordinance 2016 in terms of Article 89(2)(a)(ii) of the Constitution through resolution. Thus, it is no more applicable law. The Companies Ordinance 1984 stand revived as it was before the promulgation of the Companies Ordinance 2016. It is a settled law when a temporary law repeals a permanent statute, the permanent statute again emerges; therefore, the Companies Ordinance 1984 is revived in its original form.
However, without prejudice to the provisions of Article 89(2), in terms of Article 89 (3)(b) the Companies Ordinance, 2016 will deem to be a bill as laid before the National Assembly. In terms of Article 264 of the Constitution, all actions validly taken, anything done or suffered, investigation ordered, legal proceedings or remedy availed under the Companies Ordinance 2016 are saved. However, since the Ordinance was in nature of temporary legislation, it will not have an effect beyond the date of its expiry ie December 15, 2016 as it is the case in ordinary repeal of law by a permanent statute, they added.