ISLAMABAD: The Islamabad High Court (IHC) directed the Securities and Exchange Commission of Pakistan (SECP) to devise a mechanism for the appointment of legal advisers in companies registered with the commission.
Justice Miangul Hassan Aurangzeb of the IHC directed the SECP last week to devise the policy in consultation with the elected body of the Islamabad High Court Bar Association (IHCBA) and submit a report in this regard on May 7.
The directions came in response to the IHCBA’s petition seeking appointment of lawyers as advisers in every company registered with the SECP.
The IHCBA has made the SECP chairperson, Establishment Division secretary and vice chairmen of the Pakistan Bar Council and the Islamabad Bar Council, respondents in the petition.
The bar association through its general secretary, Muhammad Waqas Malik, petitioned the court stating that under the Appointment of Legal Advisors Act, 1974, every company was bound to have a legal adviser but the law was not being followed.
Every company registered in Pakistan, having paid up capital of Rs500,000 or more is required to appoint a legal adviser, and failure renders the responsible officer of the company liable to imprisonment, which may extend to three months or fine, or both.
The petitioner has prayed before the court to direct the SECP to ensure implementation of the Companies Act and particularly that all companies registered with it engage at least one legal adviser in accordance with law, and retention of more than three companies may be declared unlawful.
According to the data available with the IHCBA, currently, a total of 34,649 companies required to appoint legal advisers in eight cities of Pakistan.
The figure covered 3,781 companies based in Islamabad, 10,777 in Karachi, 12,773 in Lahore, 2,864 in Peshawar, 2,103 in Multan, 152 in Sukkur, 1,395 in Faisalabad and 804 in Quetta.
After these companies were issued notices, 22,346 companies appointed legal advisers, while 12,303 have yet to take the required action.
The case will now be taken up on May 7.
Published in The Express Tribune, April 11th, 2016.
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