The Chairman SECP, Zafarul Haq Hijazi here on Saturday presented the draft Companies Bill 2015 to Finance Minister, Senator Mohammad Ishaq Dar. The Bill envisages to replace the existing Companies Ordinance 1984.
The Chairman SECP on this occasion briefed the Minister about the salient features of the draft law.
The proposed Companies Bill first and foremost aims at maximum facilitation to the Corporate Sector. It has the objective of strengthening regulatory regime especially for the companies having public interest. It would streamline the procedure for issuance of new shares to ensure that adequate consideration is received against the issuance of shares and first right of allotment is given to existing shareholders. It also aims to ensure enabling provisions governing the profession of valuers. It would also have provisions regarding appointment of additional director, a simple regime for single member companies, foreign strategic investors to nominate directors, simple and convenient procedure for conversion of status of companies. The Bill also envisages maximum use of technology by the regulator and regulatees, including attending meetings through video conferencing.
The Chairman SECP further informed the Minister that the Bill aims to strengthen the legal framework for NGOs/NPOs licensed by SECP and provide mechanism for resolution of disputes through mediation.
The Finance Minister on this occasion directed the SECP to ascertain and incorporate views from all stakeholders in the draft bill before it was placed before the parliament. He desired that Draft Bill should be posted on the website of SECP forthwith for public sharing. Besides, detailed consultative process through seminars, roundtables with the stake holders should also be initiated, he remarked.
The Minister appreciated the efforts of Chairman SECP and his team for drafting the Bill. He also evinced keen interest to participate in the consultative seminars and roundtables.
It may be added that since independence, the Companies Act, 1913 was adopted as Company Law of the country. In October 1984, the Companies Ordinance replaced the said law. With a view to encouraging the growth of industrialization and to promote the corporatization, the Companies Ordinance was amended during the years 1991, 1999 and 2002. Since the amendments were in piecemeal and these being narrowly focused; they resulted in a disconnect or overlapping in the regulatory framework which demanded for a strong regulatory mechanism and greater disclosure to safeguard the interest of members, creditors and other stakeholders. Thus, there was a need to carefully examine the existing legal framework meant for efficient regulation of the entire corporate sector. In order to meet these challenges, the Commission decided to constitute a Company Law Review Commission (“CLRC”) during the year 2005; headed by the former Chief Justice of Pakistan (Mr. Justice ® Ajmal Mian) and certain other professionals were included as members of the CLRC.
After detailed research and consultative process, a Concept Paper was given by the CLRC in 2012. However, due to multiple reasons further steps could not be taken.
The present government took due cognizance of the situation and subsequently an in-house Committee headed by a former Commissioner of SECP was constituted in April 2015 for the purpose of reviewing/revamping the existing Companies Ordinance, 1984 in light of the said concept paper and developments which had taken place in the various developed jurisdictions. The Committee completed its assignment within a period of six months and a draft Companies Bill, 2015 has been prepared.
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