| The Enforcement Department |
The Enforcement Department is responsible for regulation and enforcement of companies listed on stock exchanges, public un-listed and private companies having paid-up capital of Rs. 7.5 million and above and companies formed under section 42 of the Companies Ordinance, 1984 (except insurance companies, non-banking finance companies and modarabas) with relevant laws and applicable accounting standards through review of accounts, investigation, and prosecution. In case of non-compliances, necessary actions are taken against erring companies, their directors, management and auditors, as appropriate.
The Enforcement Department monitors compliance of listed, un-listed and private companies with applicable laws, rules and regulations. The statutory frame work comprises of :
- Companies Ordinance, 1984
- Companies (Issue of Capital) Rules, 1996
- Companies (Audit of Cost Accounts) Rules, 1998
- Companies Share Capital (variation in rights and privileges) Rules, 2000
- Companies (General Provisions and Forms) Rules, 1985
- Group Companies Registration Regulations, 2008
- Listed Companies (Substantial Acquisition of voting shares and takeovers) Ordinance, 2002
- Listed Companies (Substantial Acquisition of voting shares and takeovers) Ordinance, 2008
In doing so, the Department ensures timely holding of annual general meetings and circulation of annual and interim accounts to the shareholders, provision of adequate information by companies in the notices to the shareholders in the matter of listed companies.
The department ensures that full disclosures are made by companies in their annual audited accounts in accordance with the International Financial Reporting Standards, Companies Ordinance, 1984, Accounting and Financial Reporting Standards (AFRS) issued by Institute of Chartered Accountants of Pakistan ICAP) for Small and Medium Sized Entities (SME’s) and monitoring compliance with Code of Corporate Governance to minimize corporate abuse.
The department initiates and finalizes legal actions for various defaults under Ordinance and Rules and where required investigate into the affairs of the companies making misrepresentations in financial statements, continuous deprivation of reasonable return to the shareholders and violation of statutory provisions of the Ordinance.
The examination of the schemes of arrangements with regard to mergers, acquisitions takeovers and Group Companies Registration and review of swap ratio calculation is also under the purview of the department in the matter of listed companies.
Further, applications regarding issuance of Preference shares, shares otherwise than right and shares issued on discount are also dealt by the department in the matter of listed companies only. |
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| Functional Profile |
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The Department is divided into five Wings and each wing is assigned the task of monitoring of companies in the corporate sector. Following are the brief details of each of these Wings:
Listed Companies I, Litigation and Advisory Wing
Wing I is assigned the task of enforcement and monitoring of listed companies in the corporate sector. In addition to the companies allocated is also responsible for handling the cases related to the capital issues and Take over ordinance, investor complaints relating to shares of listed companies. The wing assists the department in prosecution, litigation and advisory on routine legal matters.
Listed Companies Wing II & III
Wing II and III are assigned the task of enforcement and monitoring of listed companies in the corporate sector. In addition to the companies allocated to them, Wings II and III are also responsible for handling the cases related to the capital issues and Take over ordinance. Responsibility of appointment of cost auditors and subsequent compliance with regards to listed companies is with the Wing-III.
Non-Listed Companies Wing - I & II
Non-listed Companies Wings I and II are assigned the task of enforcement and monitoring of un- listed and private companies with paid-up capital of not less than Rs 7.5 million. CRO-wise allocation of public unlisted, foreign and private companies registered is as follows:
- Non-listed Companies Wing I Karachi, Sukkur, Quetta and Islamabad
- Non-listed Companies Wing II – Lahore, Faisalabad, Peshawar and Multan
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