2012 PLP 673 (CLD)
Application for Certificate of Registration
| Citation | 2012 PLP 673 (CLD) |
| Forum / Court | Securities and Exchange Commission of Pakistan |
| Bench Members | N/A |
| Parties | Application for Certificate of Registration |
| Primary Law | Brokers and Agents Registration Rules, 2001 |
Q1: What are the key laws and sections cited in 2012 PLP 673 (CLD)?
This judgment primarily cites: Brokers and Agents Registration Rules, 2001 as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2012 PLP 673 (CLD)?
The case was heard and decided by the Securities and Exchange Commission of Pakistan bench comprising: N/A.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2012 PLP 673 (CLD) (Application for Certificate of Registration). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Headnotes / Summary
Rr. 3, 4(h) & 5(4), (5)
Application for grant of certificate of registration as a broker
Detailed scrutiny of information/documents attached with the application for grant of certificate had revealed that financial position of the applicant company was severely deteriorated, as the company defaulted on its loans payable to the Banks; had failed to provide its audited financial statements; was facing serious unresolved management conflicts; had no proper Board of Directors as the Chief Executive Officer/Nominee Director of the company had resigned but the company was still declaring the said person as its Chief Executive Officer
Change of Nominee Director of the company was neither reported to, nor notified by, the Stock Exchange
Present Directors of the company did not fulfil the experience as stipulated in R.4(h) of Brokers and Agents Registration Rules, 2001
Allowing the company to undertake securities business in view of said deficiencies was not in the interest of investors and stock market
Applicant company being not eligible for registration as a Broker, its application was refused in terms of R.5(5) of Brokers and Agents Registration Rules, 2001.
Judgment & Decree
IMRAN INAYAT BUTT, DIRECTOR/HOD (MSCID).
This order shall dispose of the application of Guardian Securities (Private) Limited ("Company") for grant of certificate of registration as a broker under the Brokers and Agents Registration Rules. 2001 ("the Rules"), forwarded to the Securities and Exchange Commission of Pakistan ("Commission") by the Lahore Stock Exchange (Guarantee) Limited ("LSE").
2. The detailed scrutiny of the information/documents attached with the application for grant of certificate of registration revealed that financial position of the Company was severely deteriorated as the Company defaulted its loans payable to the bank(s), The Company also failed to provide its audited financial statements as of June 30, 2011.
3. Apart from the deteriorating financial health, the Company was also facing, serious unresolved management conflicts. The Company had no proper Board of Directors as the Chief Executive officer ("CEO")/Nominee Director of the Company had resigned on September 15. 2010 and the Company was still declaring him as its CEO, The change of nominee director of the Company neither reported to nor notified by the LSE. Moreover, the present directors did not fulfil the experience criteria as stipulated in Rule 4(h) of the Rules.
4. In order to decide the matter on merit, an opportunity of hearing was provided to the Company in terms of Rule 5(4) of the Rules to appear and argue its case on December 19, 2011. The hearing was attended by Mr. Abdul Mansoor Khan and Mr. Tariq Junaid ("Representatives") of the Company. The deficiencies referred to at Paras 2 and 3 above were fully explained to the Representatives during the course of hearing. The Representatives stated that the management conflicts would be resolved subsequent to renewal of registration of the Company. However, the Representatives could not provide any time bound plan to improve the financial condition of the Company. Being not agreed with the arguments of the Representatives, they were advised to resolve the management related issues before approval of the certificate of registration. Moreover, during the course of hearing the Representatives were advised to submit certain documents before January 3, 2012 to enable the Commission to consider the application of the Company for registration as a broker. However, the Company failed to provide the documents within stipulated time period.
5. Based on the deficiencies highlighted at Paras 2 and 3 above, I am of the view that allowing the Company to undertake securities business is not in the interest of investors and the stock market: hence the applicant is not eligible for registration as a broker. The same fact was also pointed out by LSE vide its letter dated November 17, 2011; wherein the LSE has stated that allowing the company to undertake the securities business shall not be in the interest of investors. Thus the application of the Company for grant of Certificate of Registration as a broker under the Rules cannot be processed, hence refused in terms of Rule 5(5) of the Rules. H.B.T./3/SEC Application dismissed.