The SECP had initiated correspondence with Pakistani companies that have entered into transactions with companies. PHOTO: PPI
ISLAMABAD: The government on Monday defended investments made by people in offshore companies, saying existing laws do not “prohibit” any company to enter into transactions with firms registered in a foreign land.
“Certain companies have entered into transactions with companies registered in foreign jurisdictions, which is not prohibited in terms of the Companies Ordinance 1984,” the finance ministry, in a written response to a question asked by PTI MNA Dr Arif Alvi, told the National Assembly.
“No direct investment has been made in offshore companies given in the Panama Papers. Prima facie, the investments mentioned in the Panama Papers were made by the persons in their individual capacity and the same has not been routed through the company’s account,” the reply reads.
The house did not discuss the ministry’s answer in detail as the mover of the question, Dr Alvi, was not present when the question turned up for its answer during the question hour.
Later, Dr Alvi requested Speaker Ayaz Sadiq to permit him to move the question on the floor of the house; however, the speaker declined his request, saying he [Alvi] would be given a chance provided the rest of the questions on the list are answered.
Alvi was not given a chance until the question hour concluded, which prompted him to say: “Parliament seems unable to resolve our problem”. He then pointed out quorum. After which heads were counted and it was announced that “the house is in order”.
Moreover, the government also informed the house that the Securities and Exchange Commission of Pakistan had initiated investigations into offshore companies.
The SECP had initiated correspondence with Pakistani companies that have entered into transactions with companies in foreign jurisdiction and legal action would be initiated if instances of noncompliance were observed.
In order to handle such matters in future, the reply reads, special provisions pertaining to the maintenance of record of foreign investment in the shape of the Companies Global Register of Beneficial Ownership has been introduced in the Draft Companies Bill, 2016.
“Further enhanced disclosures have been proposed in the financial statements in the proposed Companies Bill 2016 with respect to investments in foreign companies,” the government said.
Published in The Express Tribune, September 27th, 2016.
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