The Securities and Exchange Commission of Pakistan (SECP) has issued a circular clarifying power of the Commission to call or direct the calling of general meetings of the companies.
SECP clarified that in case of default in holding a general meeting by the Company, the Commission is empowered under section 147 of the Companies Act, 2017 to direct holding of overdue general meetings on its own motion or on application of any director or member of the Company.
The spirit of the provision of section 147 of the Act is to empower directors or members to compel the company to hold its overdue general meetings with the intervention of the Commission. Moreover, this provision has provided an alternate remedy when the normal machinery of the company management has failed.
The Commission has therefore, clarified through circular that an aggrieved member or director, in his individual capacity, may file an application to the Commission under section 147 of the Act which should be properly substantiated with proper justification along with documentary evidence. Applications filed by or on behalf of companies under section 147 of the Act shall not be considered by the Commission since a company cannot seek direction against itself.
It further clarified that if the defaulting company has convened its overdue meeting in compliance with applicable legal provisions, it will be deemed valid even if section 147 of the Act has not been invoked.
