A meeting of the Senate Standing Committee on Finance presided over by Senator Saleem Mandviwalla proposed allocation of employment quota for disabled persons in companies and at least one female board member. Chairman Securities & Exchange Commission of Pakistan (SECP) agreed to the proposals and accordingly changes were made in the proposed law.
The proposed law will now go to the Senate for approval and then to the National Assembly for re-approval of the amended one before forwarding it to the President for signature.
An official of SECP later talking to media stated it would be mandatory for company to at least take one female board member. The SECP has been empowered to increase the limit of paid-up capital beyond Rs 10 million for mandatory filing of audited financial statements by the private company. Every public interest company, which has 50 or more employees, will be required to hire two percent disabled individuals, he added.
Additionally, the law would also empower SECP to regulate the real estate sector. The meeting was informed that as per Ordinance, any person of the company can sign documents and company's chairman and chief executive would be separate persons. Pakistani and foreign directors of foreign companies have to give their all professional details. The chairman of the committee suggested that the condition of escrow account for real estate sector should be softened, upon which the chairman SECP said that softening of the condition would make it difficult to regulate the sector.
The committee convened nine sessions to discuss the law clause by clause and proposed certain changes after detailed deliberations. The proposed changes aim to empower women, enhance rights of disabled people and ensure ease of doing business. According to the SECP, the procedures regarding signing of statutory returns and making changes in the memorandum of association of the company have been simplified. The provision for winding up of companies by the courts has been rationalised. Further, any major change in the shareholding of the company will be reported to the SECP in an expeditious manner.
The mechanism has been introduced to enable companies to indemnify their officers through insurance cover. The Bill intends to encourage and promote corporatisation in Pakistan based on the best international practices. It contains provisions, including simplifying the procedure for incorporation of companies, enabling maximum use of technology, as well as encouraging paperless environment at all levels and relaxations to small and medium enterprises.
The law will facilitate the growth of economy in general and the corporate sector in particular by providing simplified procedure for ease of starting and doing business, greater protection of investors and augmenting corporatisation in the country.
Copyright Business Recorder, 2017