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June 26, 1999
Proposed Draft of the Companies (Rehabilitation of Sick industries Unit) Rules, 1999.
S.R.O. 781 (I)/99.- The following draft of the Companies (Rehabilitation of Sick Industrial Units) Rules, 1999, which are proposed to be made in exercise of the powers conferred by sections 296 and 506 of the Companies Ordinance, 1984 (XLVII of 1984), read with section 43 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997) is hereby published as required by sub-section (2) of section 506 of the Companies Ordinance, 1984 (XLVII of 1984) for the information of all persons likely to be affected thereby and notice is hereby given that the draft will be taken into consideration after fourteen days of its publication in the official Gazette.
Any objection or suggestion which may be received from any person in respect of the said draft before the expiry of the said period will be considered by the Securities and Exchange Policy Board.
THE COMPANIES (REHABILITATION OF SICK INDUSTRIAL UNITS) RULES, 1999
S.R.O.782 (I)/99.- In exercise of the powers conferred by section 296, read with section 506, of the Companies Ordinance, 1984 (XLVII of 1984), and clause (b) of section 43 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997), the Securities and Exchange Policy Board hereby makes the following rules, the same having been published previously as required under the said section 506, namely:-
THE COMPANIES (REHABILITATION OF SICK INDUSTRIAL UNITS) RULES, 1999
PART I - PRELIMINARY
1. Short title and commencement.- (1) These rules may be called the Companies (Rehabilitation of Sick Industrial Units) Rules, 1999.
(2) They shall come into force at once.
(3) They shall apply to all industrial companies.
2. Definition.- (1) In these rules, unless there is anything repugnant in the subject or context,-
(a) "Bankers' Committee" means the Committee constituted by the State Bank of Pakistan comprising Heads of banks and financial institutions to implement the recommendations of the State Bank of Pakistan Coordination Committee relating to the revival of sick units;
(b) "Chairman" means the Chairman of the Task Force;
(c) "Commission" means the Securities and Exchange Commission of Pakistan;
(d) "Industrial Company" means a company which owns one or more industrial units;
(e) "Member" means a Member of the Task Force;
(f) "Ordinance" means the Companies Ordinance, 1984 (XLVII of 1984);
- "Sick Industrial Company" means an industrial company (being a company registered for not less than five years) which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth and has also suffered cash losses in such financial year and the financial year immediately preceding such financial year.
Explanation.- For the purposes of this clause-
(i) "cash loss" means loss as computed without providing for depreciation;
(ii) "net worth" is the sum total of the paid up capital and free reserves;
(iii) "free reserves" means all reserves credited out of the profits and share premium account but does not include reserves credited out of re-evaluation of assets, write back of depreciation provisions and amalgamation.(h) "Task Force" means a Task Force constituted and set up in terms of sub-section (2) of section 296 of the Ordinance for revival of sick industrial units.
(i) "Vice Chairman" means the Vice Chairman of the Task Force.
PART II - ESTABLISHMENT OF TASK FORCE FOR REVIVAL OF SICK INDUSTRIAL UNITS
3. Constitution of Task Force.- (1) There shall be constituted and established a Task Force to be known as the "Task Force for Revival of Sick Industrial Units" to exercise the jurisdiction and powers and to discharge the functions and duties conferred or imposed on it by section 296 of the Ordinance or under these rules.
(2) The Task Force shall consist of a Chairman, a Vice Chairman and not less than five and not more than twelve other Members to be appointed by the Federal Government.
(3) The Chairman, Vice Chairman and other Members of the Task Force shall be persons of ability, integrity and standing who have special knowledge and experience in banking, industry, law, finance and accountancy.
4. Secretariat of the Task Force.- The Task Force shall have a permanent secretariat at the head office of the Habib Bank Limited, Karachi.
5. Powers and functions of the Task Force.- Without prejudice to the generality of the provisions of section 296, the Task Force shall, for the purposes of the role assigned to it under the said section or under these rules, have the same power as are vested in a court under the Code of Civil Procedure, 1908 (Act V of 1908), while drawing up a rehabilitation plan, in respect of the following matters, namely,-
(a) enforcing the attendance of persons and having them on oath or affirmation;
(b) compelling the discovery and production of books and papers and any material objects;
(c) issuing commissions for examination of witness.
6. Finances.- (1) All finances for the working of the Task Force shall be borne by the banks and financial institutions jointly who are represented on the Bankers' Committee.
(2) The requirements of finances for the Task Force shall be determined by it in its meetings from time to time and shall be apportioned to the financiers through consensus.
7. Procedure and conduct of the business.- (1) The following procedure shall be followed for the conduct of the business of Task Force, namely:-
It shall -
(i) prepare and furnish recommendations for a company to be declared as a sick industrial company in terms of sub-section (1) of section 296 of the Ordinance;
(ii) after a company has been declared 'sick' by the Commission, prepare rehabilitation plan for the sick industrial company and submit the same to the Commission for publication in accordance with sub-section (4) of section 296 of the Ordinance;
(iii) examine the objections received in respect of the rehabilitation plan and submit its recommendations to the Commission in this regard;
(iv) prepare and submit for approval of the Commission, final rehabilitation plan for a sick industrial company;
(v) monitor the implementation of the rehabilitation plan; and
(vi) report any non-compliance with the rehabilitation plan to the Commission.(2) In the performance of its functions, the Task Force shall act on the advice of the Commission and in accordance with the recommendations of the Bankers' Committee.
(3) While submitting the rehabilitation plan to the Commission, a copy of the same shall be sent to the Bankers' Committee and also to the sick industrial company.
8. Reference to the Task Force.- The Task Force shall not undertake to make its recommendations for declaration of a company as a sick industrial company or to prepare a rehabilitation plan for a sick industrial company unless a recommendation has been received from the Bankers' Committee.
9. Decisions by the Task Force.- All decisions of the Task Force shall be taken by a majority vote in a meeting of the Members and shall be expressed in the form of recommendations.
PART III - MEETINGS AND OTHER MATTERS
10. Meetings of the Task Force.- (1) The quorum of a meeting of the Task Force shall be five Members.
(2) Every meeting shall be presided over by the Chairman or in the case of his absence by Vice Chairman.
(3) The Task Force may hold its meetings on such dates and at such places as it may deem fit.
(4) The Task force shall meet at least twice every month.
(5) The Chairman shall have the authority to convene or adjourn the meeting.
(6) In the case of the difference of opinion among the Members, the opinion of the majority present at the meeting shall prevail and decision of the Task Force shall be expressed in terms of the views of the majority. Any Member dissenting from the majority view, may record his views separately. If the members are evenly divided in their opinions, the Chairman shall have a second or a casting vote.
11. Appointment of advisers and consultants.- The Task Force may, on such terms and conditions as it may deem fit, employ and pay consultants and agents and technical, professional and other advisers including without limitation, bankers, stock-brokers, surveyors, valuers, actuaries, accountants, lawyers, and other persons to transact any business or to do any act required to be transacted or done in the exercise of its powers, the performance of its functions or for the better implementation of the purposes of these rules.
12. Protection of action taken in good faith.- No suit or other legal proceedings shall lie against the Task Force or its Chairman or Vice Chairman or any of its other Members to discharge any function under these rules for any loss or damage caused or likely to be caused by any action which is in good faith done or intended to be done in pursuance of these rules.
13. Removal of difficulties.- If any difficulty arises in giving effect to any provision of these rules, the Policy Board may, by notification in the official Gazette, make such provisions as may appear to it to be necessary for the purposes of removing the difficulty.
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No.296/Com.(CL)/99
( MUHAMMAD SIDDIQUE )
Joint Registrar of Companies (H.q.)
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