Registrar of cos authorised to file petition for winding up of company in high court

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has authorised the registrar of companies, the Company Registration Office, Karachi, to present winding up petition against Gulistan Spinning Mills Limited before the high court for winding-up of the company.

According to an order issued by the Adjudication Division, SECP, this order shall dispose of the proceedings initiated through the above stated show cause notice (the SCN), issued under Section 304 of the Companies Act 2017 (the Act) read with Section 301 thereof, to Gulistan Spinning Mills Limited (the company), and its directors including the chief executive officer of the company (respondents).

Brief facts of the SCN are that the company is a public limited company incorporated under the Act (the repealed Companies Ordinance, 1984) and shares of the company are listed on the Pakistan Stock Exchange (PSX). As per available information, principal business of the company is to manufacture and sale yarn. Annual audited accounts of the company for the year ended June 30, 2018 transpired that the company had suspended its business for a whole year.

The additional registrar, the Company Registration Office, Karachi approached the commission for grant of sanction in terms of Section 304 of the Act to present a petition before the High Court of Sindh for winding up of the company on the grounds that the company had suspended its business for a whole year.

Keeping in view the above, proceedings under clause (b) of Section 304 of the Act read with clause (m) of Section 301, thereof, were initiated vide the SCN and were advised to appear on August 19, 2019, to show cause as to why petition for winding up of the company may not be presented by the registrar of companies before the court.

The winding-up proceedings initiated by the commission are independent from the mentioned scheme of arrangement filed by the company along with its creditors and the same is subject to the judicial review. The grounds on the basis of which winding-up proceedings were initiated, as mentioned in the SCN i.e. suspension of business operations since 2018 still exist and no evidence is submitted, which could support the case for resumption of business activities by the company.

The respondents have not furnished any concrete revival plan to resume the operations by the company. It is, therefore, established that the business operations of the company have remained suspended for more than a year, hence, attracting applicability of Section 30 I (m) of the Act. Therefore, in exercise of the powers under 304 of the Act, hereby, authorize the registrar of companies, the Company Registration Office, Karachi, to present winding up petition before the august court, for winding-up of the company.

Nothing in this order may be deemed to prejudice the operation of any provision of the Act providing for imposition of penalties on the respondents of the company in respect of any default, omission, violation of the Act, the SECP added.

Copyright Business Recorder, 2021