The Securities and Exchange Commission of Pakistan (SECP) has terminated proceedings against Nazir Cotton Mill Limited on the grounds that the company has made required steps to reopen its doors.
After six years, the SECP adjudication department stated in its decision that the company’s primary line of business has shifted from textile to setting up/operating cattle rearers, sheep farmers, and poultry, which was approved by shareholders at the Extra-Ordinary General Meeting held on May 16, 2020.
The company generated quarterly revenue of Rs. 8.5 million and Rs. 11.3 million for the quarters ending December 31, 2020 and March 31, 2021, respectively.
The head of the adjudicating department noted that the respondents had done the required steps to resurrect the company’s operations.
“In light of the facts, I believe that sanctioning the filing of a winding-up petition at this point may not be in the best interests of the company’s members. Additionally, the company’s business has exhibited signs of recovery through dairy business sales, which have resulted in the company’s resumption of operations.”
“I have observed that the SCN’s fundamental premise, namely the suspension of the company’s operations, has been addressed. As a result, I see no need to continue the company’s winding-up procedures and consequently dismiss them without further action,” he added.
It is worth noting that SECP initiated actions against the corporation via the SCN on the basis that the company had been dormant for more than six years.
On March 28, 1974, the company was incorporated under the then-current Companies Act, 1913 (now known as the Companies Act 2017 or “the Act”). The company is publicly traded on the Pakistan Stock Exchange (PSX), and its primary business is manufacturing, selling, purchasing, and dealing in all varieties of yam.
According to available sources, the company’s operations have been halted since 2009. A company may be wound up by the Court pursuant to clause (c) of Section 305 of the Ordinance if its business is suspended for a whole year.
The Company Registration Office (CRO) had applied for sanction under clause (b) of Section 309 of the Ordinance and clause (c) of Section 305 thereof in order to bring a petition to the High Court for winding up of the company on the grounds that it had been dormant for more than six years.