Symposium On Corporate Supervision, Regulatory Actions Begins

The Securities and Exchange Commission of Pakistan (SECP) is hosting the Symposium on Corporate Supervision and Regulatory Actions on June 23-24

ISLAMABAD, (UrduPoint / Pakistan Point News - 23rd Jun, 2023 ):The Securities and Exchange Commission of Pakistan (SECP) is hosting the Symposium on Corporate Supervision and Regulatory Actions on June 23-24.

The first day of the symposium saw notable members of the judiciary take the stage and address key challenges and opportunities pertaining to the corporate sector of Pakistan, said a press release issued here.

SECP Chairman Akif Saeed, in his welcome address, said, "We aim to build a strong and growing corporate sector that is attractive to both domestic and foreign investors, ensuring economic stability and prosperity for our nation".

He added, "In this crucial mission, we are fortunate to be assisted by our esteemed partners at the World Bank, and we express our heartfelt gratitude for their invaluable support in creating a conducive corporate environment in Pakistan".

Justice Shahid Karim, Honorable Justice (R) Hamid Ali Shah, and Barrister Iftikharuddin Riaz highlighted the developments in Company Law, the need for upgrading the procedures under Company Law, and discussed new concepts.

IHC Advocates Syed Bulent Sohail and Umer Ejaz Gilani presented a case study on the empirical analysis of Company Court judgments and also shared recommendations on the subject.

Honorable Chief Justice of Pakistan (R) Tassaduq Hussain Jillani also delivered the keynote address at the symposium and gave a presentation on corporate social responsibility (CSR) and its reforms in Pakistan.

He pointed out some successful CSR programs in the country and also shed light on CSR Reforms undertaken by the SECP including CSR reporting guidelines, integration of CSR into the Code of Corporate Governance as well as capacity building and awareness programs to educate companies on CSR.

He also pointed out the areas where Pakistan's corporate sector is lacking in CSR. He said that only listed companies are required to comply with the CSR requirement and that SECP has taken a soft approach so far which needs to be made more stringent.

Chief Justice of Pakistan (R) Iftikhar Muhammad Chaudhry spoke on the role of the judiciary in economic development, regional integration, and Foreign Direct Investment (FDI).

He said that a well-functioning judiciary has a pivotal role in governance, democracy, constitutionalism, and economic growth.

He added, "A judiciary that upholds the principles of justice, accountability, and equitable access can truly propel our nation towards economic development, regional integration, and foreign investment".

He said that there should be a clear division of responsibilities, even amongst courts, so that the matters of companies and businesses are not delayed because the courts are busy elsewhere.

Justice Jawad Hassan gave a keynote address on "Evolution of Company Law Jurisprudence and Role of Company Benches of the Hon'ble High Court". He accentuated Sections 4, 5, and 6 of the Companies Act, 2017.

He quoted examples from his own judgments and explained how the interpretation of law is only half of the story, the laws themselves are equally significant. He mentioned SECP's laws and shed light on their significance.

Justice Yousuf Ali Sayeed spoke on "Reflective Loss and the Derivative Action". He said that owning a company's shares does not offer a right to shareholders over the assets of the company, and the cases need to be decided to keep this in mind.

He elaborated how the shareholders, at times, try to claim damages that are not necessarily theirs but are, in fact, the company's losses. However, if the claimant can satisfy that the reported loss counts as a derivate loss, then the court should also operate accordingly.

Chief Prosecutor and SECP Prosecution & Legal Affairs Division Head-Executive Director Muzzafar A. Mirza gave a presentation on "Laws Governed by SECP with special reference to supervision and regulatory actions".

Badiuddin Akber, CEO of Central Depository Company (CDC) of Pakistan Limited, gave a presentation on CDC procedures, including Automated Securities Settlement Process. He also elaborated on Investor Protection Measures put in place by the CDC. "CDC has 1,149 securities, 666 Mutual Funds/Pension Funds, as well as 193.86 billion shares worth PKR 4,74 trillion," he informed the audiences, adding that CDC also has 333,013 sub-accounts and 118.53 billion shares in investor account services".

Senior Puisne Judge Justice Irfan Saadat Khan, from the High Court of Sindh, addressed the symposium on "Implementation of Sections 5 & 6 of Companies Act, 2017, Issues and Challenges." Sergio Ariel Muro, World Bank (WB) Senior Financial Sector Specialist, delivered a presentation on the subject of "Towards Efficient Business Restructuring and Exit: Lessons from International Experience".

He underlined the importance of establishing a robust insolvency system.

"A modern, credit-based economy requires a predictable, transparent, & affordable enforcement framework through efficient mechanisms as well as a sound insolvency system", he said, adding, "Uncertainties in the legal framework on security rights cause high costs and credit unavailability".

He recommended strengthening formal insolvency mechanisms, establishing accessible and cheap out-of-court procedures for MSEs, facilitating conciliation and mediation, and promoting debt forgiveness and discharge of natural-person debtors.

Justice Syed Muhammad Attique Shah, from Peshawar High Court, spoke on "Best practices in conducting cross-examination".

He talked about including technology in judicial processes, such as Lahore and Peshawar courts allowing video link appearances.

He shared examples from his own career and insisted that technology could prove instrumental in ensuring speedy justice.

Advocate Supreme Court Asma Hamid took the stage to speak on the Admissibility of evidence and related issues in corporate matters. She outlined the rights and responsibilities of company benches and processes of relevant jurisprudence under the Companies Act, 2017.

She presented examples of cases that elaborate on the applicability and operationality of different laws pertaining to companies. She gave comprehensive guidelines on how to approach a case from the perspective of the petitioner as well as a jurist.

Justice Sardar Ejaz Ishaq Khan IHC gave the final address of Day 1 of the Symposium on Corporate Supervision and Regulatory Actions: Challenges and Reforms, on "Company Bench and Conduct of Liquidation." "I think that SECP needs to ensure expertise in finance, accounting, and law, not just for the financial officers but especially for the liquidators, who need to be well versed in Finance and accounting," he said.

He also insisted on the need for adjusting remunerations for liquidators in Pakistan, describing the current standards as "out of sync". He reiterated CJ Iftikhar Chaudhry's viewpoint about prioritizing company cases so they are not delayed due to other cases.

He said that SECP needs to look into whether they can shoulder the responsibility of a liquidation case. They should not be focused on digging until they find the final penny to make a case ascertainable.

Justice Mian Gul Aurangzeb gave the concluding speech of the day. He built upon the points raised by Justice Ejaz and said, "SECP should give us a panel of liquidators who are qualified".

"SECP ought to play a more proactive role in having a larger panel of legal advisors than they have right now, not just in cases of liquidation but also in other corporate matters," he said, while also appreciating SECP prosecutors for assisting the court.

"The SECP and the IHC ought to sit together, at least the company judges in the IHC, for these matters to be adjudicated expeditiously. There should be dedicated judges, as former CJ Iftikhar Chaudhry said, or at least dedicated time frames, to decide on these matters," he added.

SECP's Chief Prosecutor, Muzzafar A. Mirza, gave a comprehensive presentation on the laws governed by SECP with special reference to supervision and regulatory actions.

SECP Executive Director Imran Inayat Butt spoke on the Transformation of Corporate Supervision, and shed light on the aims and details of the supervision process, as applicable under SECP's ambit.

SECP's Chairman Akif Saeed distributed shields among the Honorable Justices who presented keynote addresses.

Tomorrow stakeholder consultations will be also held to suggest a way forward for expeditious disposal of matters relating to mergers & amalgamation, liquidation, and adoption of ADRs.

Honorable members of the superior judiciary, Registrars, prominent advocates, key adjudication officers of the regulated sectors of SECP and related professionals participated in the symposium.