ISLAMABAD: The federal cabinet on Wednesday approved the Draft Companies Bill 2016 that would force the directors and shareholders of the companies to declare their stakes at home and abroad after the issuance of Panama papers.
The government after getting approval from the federal cabinet would now table the Draft Companies Bill 2016 in the National Assembly for legislation. The government has not promulgated it through Presidential Ordinance in order to avoid criticism from the opposition parties in the parliament.
The Bill would make mandatory for the directors and shareholders to report their foreign equity investments to the Securities and Exchange Commission of Pakistan (SECP). The government has brought the Panama-related changes in the Bill, after names of Pakistanis holding offshore companies appeared in the media.
The Draft Bill emphasizes use of technology at all levels including filing of documents to SECP electronically, supply of documents to members electronically, voting through e-ballot, participation in meetings through video link, and conversion of physical shares into book-entry form. He stated that in order to address challenges posed by off-shore companies, an enhanced disclosure regime for officers and members of those companies has been provided under the Draft Bill, while stringent penalties have been introduced in cases of false or non-disclosure.
He said that the Draft Bill also introduces other reforms such as simplification of the Memorandum, passing of members’ resolution through circulation, and the amalgamation of wholly owned subsidiaries in the holding company without any approval. He further informed that the Draft Bill also introduces Agriculture Promotion Company as a new type of a company, in order to promote the agriculture sector.
The Finance Minister, Ishaq Dar, held a meeting on matters related to the Securities & Exchange Commission of Pakistan (SECP).
The Finance Minister said that the Federal Cabinet has today approved the Draft Companies Bill 2016. He directed that, in pursuance of the approval of the Cabinet, all remaining steps should be completed expeditiously so that all stakeholders can start benefitting from the reforms envisaged under the proposed Bill at the earliest.
Chairman SECP also briefed the Finance Minister on the implementation status of other reforms being undertaken by SECP. The meeting was attended by senior officials of SECP and the Ministry of Finance.
