The Securities and Exchange Commission of Pakistan (SECP) has absolved Zarai Taraqiati Bank Limited (ZTBL) of an applicable penalty while cautioning the bank to exercise caution in the future when filing returns.
According to a document obtained by Propakistani, the SECP adjudicating department dismissed the proceedings launched by a show cause notice filed on ZTBL for failing to comply with the requirements of section 130 of the Companies Act 2017.
The ZTBL has failed to file annual returns for the years 2017, 2018, and 2019. This is a violation of section 130 of the Act. On the face of it, the default triggered the application of criminal sanctions contained in section 130 sub-section (6) (b).
Failure to comply with necessary legal obligations demanded enforcement under the aforementioned sections of law. The corporation was served with a notice under section 479 (5) of the Act, with the advise to show cause why penalties, as defined in clause (b) of sub-section (6) ibid, should not be imposed, the document continued.
The ZTBL’s representative submitted a written response, attended at the hearing, and contended that the annual return for the year 2017 on mandated Form, ‘A’ regarding the AGM held on May 30, 2017 was already filed on July 12, 2017, together with the late filing charge.
Following that, AGMs for 2018 and 2019 were unable to be convened because the Board of Directors is non-functional and does not meet the minimum membership requirements set out in the Banks Nationalization Act 1974.
Annual returns for 2018 and 2019 have, however, been filed on June 23, 2020, in accordance with the rules of section 130 of the Act. Compassionate relief under section 468 of the Act was requested, along with a vow to be more cautious in the future.
The adjudicating officer stated in his order that each company with or without share capital shall prepare and file with the registrar an annual return containing specified information as of the date of the annual general meeting or, if no such meeting is held or if held is not concluded, as of the last day of the calendar year.
“The return must be filed with the registrar within thirty days of the date of the annual general meeting held during the year, or, in the absence of such a meeting or one that is not concluded, within thirty days of the last day of the calendar year to which it relates,” he explained.
Subsection (6) (b) of Section 130 of the Act specifies that any violation or failure to comply with the provisions of this section constitutes an offence punishable by a level 1 penalty on the standard scale.
According to the record and statements made during the hearings, the 2017 tax return has already been filed. Additionally, the failure to file yearly returns for 2019 and 2020 has been alleviated. As a result, this is a case of late filing. Additionally, a late filing fee has been paid.
In light of the argued reasons, I believe it is reasonable to absolve the corporation of any applicable penalty with a warning to exercise caution in the future and the admonition to comply to the Act’s requirements in their entirety.