SECP Makes Monitoring by Scrutinizers Mandatory for Election of Directors

The Securities and Exchange Commission of Pakistan (SECP) has made it mandatory for the Board of the listed companies to appoint scrutinizers (auditors) to monitor the electronic voting process for the election of directors.

The SECP issued a notification on Friday to amend the Companies (Postal Ballot) Regulations, 2018.

The SECP’s regulations revealed that the Board of a listed company shall appoint a scrutinizer for the purpose of voting in the meeting where the following businesses are to be transacted- (a) businesses mentioned in section 183 (3) (a) and (b) of the Companies Act; (b) investment in associated companies as mentioned in section 199 of the Act except where investment is made in wholly owned subsidiary; and election of directors. Provided that listed companies are required to appoint scrutinizer under this regulation after three months from date of publication of this amending notification.

The scrutinizer appointed shall be the statutory auditor of the company or any other auditor fulfilling requirements stated in section 247 of the Act and having a satisfactory QCR Rating from the Institute of Chartered Accountants of Pakistan (ICAP); and shall in the opinion of the Board has necessary knowledge and experience to independently scrutinize the voting process.

The scrutinizer appointed may take the assistance of any person who is not in employment with the company for the purpose of fulfilling his/her responsibilities.

The scrutinizer appointed shall observe that satisfactory procedures of the voting process including adequate precautionary measures to comply with the requirements of these regulations are in place and validate the voting results compiled by the Company which includes votes cast in person, through proxy, video-link and postal ballot immediately after the conclusion of the voting. In the case of e-voting, ensure the presence at the time of unblocking the votes by the chairman to observe and oversee the process.

The scrutinizer appointed shall be available in the general meeting and observe the count of the votes cast, either manually or electronically and observe that there is no duplication of votes cast, either manually or electronically, SECP added.