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Business & Finance

PAAPAM elections not annulled

ISLAMABAD: The Directorate General of Trade Organisations (DGTO), an arm of Ministry of Commerce, has annulled...
Updated 20 May, 2021

ISLAMABAD: The Directorate General of Trade Organisations (DGTO), an arm of the Ministry of Commerce, has not annulled elections of Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM), 2020-21 but canceled the appointment of Secretary-General and imposed a fine of Rs 0.1 million for “illegalities”.

The order written and signed by Registrar, Trade Organisations (TO), Riaz Ahmed was released on May 18, 2021, on a complaint of Tariq Jamal-ud-Din of M/s Covico Engineering Works versus PAAPAM.

The complainant had alleged that there were sufficient material “irregularities” in the conduct of the elections to justify the annulment of elections for the year 2020-2021 conducted by PAAPAM.

The alleged irregularities broadly included “financial misappropriation/embezzlement” as well as “contravention” of Rule 16, 18, 19 and 24 of Trade Organization Rules, 2013.

During the course of the hearing, the counsel for the complainant contended that the constitution of the election commission and nomination of members of the election commission were clear violations of a provision of rule 16 of the Trade Organizations Rules, 2013. The election commission was constituted on 30th June 2020.

The complainant contended that the Election Schedule and Election Commission constituted after the expiry of the tenure of the Executive Committee under the supervision of an illegitimate “Acting Secretary-General” is not recognized in the provisions of TOA, 2013 and ToRs, 2013. It was further stated that PAAPAM appointed Muhammad Ashraf Sheikh as a member of the Election Commission who was previously an Executive Committee member in 2018-19, which is a clear violation of Rule 16(c) of ToRs, 2013.

The counsel for the complainant also raised objections on 10 “bogus” voters included in the final voter's list of PAAPAM and claimed that these voters have “fake” NTN and no relevant business in the category of the Association. He further contended that PAAPAM conducted the elections on one class of membership that is Corporate Class and clearly denied the Associate Class their right to vote which is a clear violation of Trade Organizations Rules and democratic principles. Furthermore, the alleged voter list was never scrutinized by any independent Managing Committee.

The Counsel for the Complainant further alleged that elections were conducted after a stipulated time prescribed in Rule 14(a) of Trade Organizations Rules, 2013.

The Counsel for PAAPAM rejected all the allegations of the complainant and argued that there is a procedure for filing objections on the voter list election schedule laid down in Rule 18 of TORS, 2013 however none were received by PAAPAM. Hence, PAAPAM was of the view that the petition is non-maintainable being time barred.

Regarding the issue of non-extension of right to vote to the Associate Class members, the counsel for PAAPAM committed before the Regulator (TO) during earlier hearing conducted on February 14, 2021 to provide proof showing both the class of memberships i.e. Corporate and Associate. However, during the hearing conducted on May 05, 2021, PAAPAM maintained that PAAPAM only has one class of members that is Corporate.

According to Registrar, TO, it is apparent that the procedure for appointment laid down in Rule 24 for appointing a Secretary General has not been followed. Moreover, no evidence has been submitted to justify to the Regulator that contravention of Rule 1117) of ToRS, 2013 is not being committed. Furthermore, documents submitted to the Regulator show that proper procedures in appointment of Election Commission of PAAPAM, and formulation of voters list have not been followed in manner prescribed in the Trade Organizations Act, 2013 and Rules made there under. As such, it is clear there are legal infirmities in the management and organizational structure of PAAPAM, and the Association is not adhering to the Trade Organization Act, 2013 and Rules made there under. However, at the same time, it is also true that the Association timely informed DGTO office regarding delay in elections due to stay order on September 05, 2020 of the Lahore Civil Court in application of Muhammad Waheed Gul Vs Pakistan Association of Automotive Parts & Accessories Manufacturers.

It is also “abundantly apparent” that PAAPAM has completely violated Rule 11(7) of ToRS, 2013 by not providing any evidence to refute the claim of the complainant that there is only one class of member in the TO, despite receiving DGTO directions vide email of March 16, 2021. Furthermore, an opportunity to explain this irregularity was also provided to PAAPAM on April 28, 2021 but the Association failed to submit any defense on its behalf.

After hearing arguments and record/evidence perused, the following orders were passed: (i) PAAPAM has been directed to ensure compliance with all provisions of Trade Organizations Act and Rules, 2013 made there under within 30 days of passing of the order. This includes, inter-alia, appointment of an impartial, qualified Secretary General, formulation of 2 classes of members, appointment of legitimate Election Commission for PAAPAM elections 2021; (ii) the newly-appointed Secretary General is to conduct an impartial inquiry into the matter, and submit recommendations to the Regulator fixing responsibility on those who have violated the law; (iii) the persons so recommended shall be debarred from becoming Members of PAAPAM, or any other TO in Pakistan for a period of two years; (iv) the newly appointed Secretary General shall submit a comprehensive report on the matter within 30 days of passage of this order, and shall also have an independent audit of all finances of the TO for the last 5 years; and (v) PAAPAM has been fined Rs 100,000 for irregularities, negligent attitude and not being able to provide evidence on issues committed by them.

DGTO stated that in case PAAPAM is unable to resolve all these issues within the specified time-frame, a management committee shall be formulated to conduct the elections of PAAPAM for the year 2021-2022. Moreover, the Complainant, Respondent and their counsels are advised to keep decorum of the Court. Any discourteousness or incivility will be dealt with as per law properly and brought to the notice of the relevant Bar Association(s).

Copyright Business Recorder, 2021

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