The board of directors of a company shall not increase the capital by issue of further shares by way of right beyond the authorised capital as stipulated in Memorandum and Articles of Association of the Company. This has been directed by the Securities and Exchange Commission of Pakistan (SECP) to companies through a circular Number 30 of 2016 issued here on Friday.
According to sources, the SECP has issued directions to the companies and restricted the increase in capital by issue of further shares by way of right beyond the authorised capital as stipulated in Memorandum and Articles of Association of the Company by the board of directors of a company. According to the circular, in exercise of the powers conferred by section 50613 of the Companies Ordinance 1984, the Securities and Exchange Commission of Pakistan has directed that board of directors of a company shall not decide or recommend to increase the capital by issue of further shares by way of right, otherwise than right or bonus shares beyond the authorised capital as stipulated in Memorandum and Articles of Association of the Company. All companies shall ensure compliance with the requirements of this Circular, the regulator maintained.