Action taken against errant co: SECP receives list of INGOs not allowed to work

The Securities and Exchange Commission of Pakistan (SECP) has received a list of International Non-Governmental Organizations (INGOs) from the Ministry of Interior, which are not allowed to work in Pakistan, for necessary action by the commission. Taking action on the list, the SECP has appointed an administrator to manage the affairs of a company. According to an order of the SECP issued by the Commissioner
(Corporatization and Compliance Department) Company Law Division, the BRAC Pakistan (the "Company") was granted licence (the "Licence") on January 31, 2008 under Section 42 of the repealed Companies Ordinance, 1984, now the Companies Act, 2017 (the "Act") and was subsequently registered on February 04, 2008.
The Commission received adverse reports from government departments, along with the direction to the Commission to cancel the registration of the company due to its involvement in subversive/anti-state activities. Additionally, the Commission received a letter from the Ministry of Interior (the "MOP'), conveying the list of International Non-Governmental Organizations (the "INGOs") that are not allowed to work in Pakistan, and the said list included an INGO, namely Stichting Brac International (the "INGO"), having its presence in Pakistan through the Company. Accordingly, the Commission in exercise of powers under sub-section (5) of the section 42 of the Act and after complying with the requirements of the Act, revoked the licence of the Company and directed the Company to proceed in terms of section 43 of the Act.
It is pertinent to note that on revocation of licence of a company by the Commission under section 42 of the Act, the provisions of section 43 of the Act require that all the assets of the company, after satisfaction of all debts and liabilities shall be transferred to another company licensed under section 42, preferably having similar or identical objects to those of the company, within ninety (90) days from the revocation of the licence; and subsequently, the board of such company shall file a compliance report to the registrar. Subsequently, after the acceptance of the report by the registrar, the board shall initiate necessary proceedings for winding up of the company voluntarily or where it has no assets and liabilities, make an application to the registrar for striking the name of the company off the register, SECP order said.
Nevertheless, sub-section (4) of section 43 of the Act provides that if the company fails to comply with any of the aforesaid requirements of section 43 of the Act within the specified period, the Commission may, without prejudice to any other action under the law, appoint an administrator to manage affairs of the company subject to such terms and conditions as may be specified in the order and initiate necessary proceedings for winding up of the company. In this regard, sub-section (5) of section 43 of the Act stipulates that the provisions of section 291, except those of sub-section (1) thereof, shall apply mutatis mutandis to the administrator appointed under section 43 of the Act.
The Commission found that circumstances exist which necessitate the appointment of an administrator to manage affairs of the Company and as such appointed Naveed Qazi of Karachi, as Administrator vide its meeting held on May 27, 2019 to manage the affairs of the Company on the laid down terms and conditions governing his appointment.
After successful transfer of assets and liabilities of the company to the Transferee Company, the Administrator shall submit a report to the Commission after getting it audited from A Rated audit firm in this regard and initiate necessary proceedings for winding up of the Company. The report shall inter alia contain complete details of total assets, total debts and liabilities transferred to transferee company, letter of concurrence from transferee Company, and certificate confirming completion of transfer of assets issued by the auditor of transferee company, the SECP order said.