Corporate And Regulatory

Companies (Invitation & Acceptance of Deposits) Rules, 1987

Status: In force


S.R.O. 778 (1)/87, Islamabad, the 26th September, 1987. In exercise of the powers conferred by section 88, read with section 506 of the Companies Ordinance, 1984 (XLVII of 1984), and the Finance Division Notification No. S.R.O. 698(1)/86, dated the 2nd July, 1986, the previously as required under the said section 506, namely:-

1.            Short title and commencement. (1) These rules may be called the Companies (Invitation and Acceptance of Deposits) Rules, 1987.

(2)          The shall come into force on the first day of January, 1988.

(3)          They shall apply to all companies, except the banking companies.

2.            Definitions.- (1) In these rules, unless there is anything repugnant in the subject of context,-

(a)          'banking company' means a banking company as defined in the Banking Tribunals Ordinance, 1984 (LVIII of 1984);

(b)          'deposit' means any deposit of money with, and includes any amount borrowed by a company but shall not include a loan raised by issue of debentures or a loan obtained from a banking company or a financial institution;

(c)           'depositor' includes any person, other than a banking company or a financial institution, who has given a loan or provided finance other than

(i)            finance by way of contribution towards share capital; or

(ii)           finance by way of redeemable capital on contribution to debentures issued by the company to a company.

(d)          'form' means a form annexed to these rules;

(e)          'free reserves' includes any amount which, having been set aside out of revenue or other surpluses, excluding surplus on revaluation assets, after adjustment of all intangible of fictitious assets is free in that it is not retained to meet any diminution value of assets, specific liability, contingency or commitment known to exist at the date of the balance sheet;

(f)           'Ordinance' means the Companies Ordinance, 1984 (XLVII of 1984);

(g)          'Schedule' means a schedule to the Ordinance; and

(h)          'section' means a section of the Ordinance.

(2)          All other terms and expressions used but not defined in these rules shall have the same meaning as in the Ordinance.

3.            Acceptance of deposits by companies.- (1) No company shall accept any deposit-

(a)          for purposes other than the financing of its own business as referred to in Explanation to clause (c)of section 5 of the Banking Companies Ordinance, 1962 (LVII of 1962);

(b)          from another company, except a company which is its holding company;

(c)           which is repayable on demand or on notice or repayable earlier than the expiry of six months or later than the expiry of thirty-six months from the date acceptance or renewal of such deposit, or renew any such deposit accepted by it, whether before or after the commencement of these rules:

Provided that a company may for the purpose of meeting any of its short-term requirements of funds, accept or retain or renew deposits for repayment earlier than six months from the date of deposit or renewal, as the case may, be subject to the conditions that such deposits:

(i)            shall not exceed ten per cent of the aggregate of the paid-up share capital arid free reserves of the company; and

(ii)           shall be repayable not earlier than three months from the date of such deposit or renewal, as the case may be:

Provided further that, where a company has, before the coming into force of these rules, accepted any deposit repayable after a period of more than thirty-six months, such deposits shall, unless renewed after the coming into force of these rules, be repaid in accordance with the terms of such deposits.

(2)          No company shall accept or renew or retain any deposits, if the amount of such deposit, together with the amount of such other deposits, referred to in this rule and outstanding on the date of acceptance or renewal of such deposits, including any deposit accepted under proviso to sub-rule (1), exceeds twenty-five per cent of the aggregate of the paid-up share capital and free reserves of the company.

(3)          If, immediately before the commencement of these rule, any deposit, accepted by a company before such commencement, exceeds the limit specified in sub-rule (2), the company shall, within five years from the date of coming into force of these rules, bring down the deposits to the limit aforesaid and for this purpose the company shall not renew or retain such deposits on expiry of their pre-existing term nor accept any further deposits besides repaying the same and adopting other measures to bring down the aggregate deposits within the limits permissible under this rule during the said period of five years.

(4)          Nothing contained in this rule shall apply to the following types of deposits, namely;-

(a)          any amount received from or guaranteed by the Federal Government or the Government of a province or a corporation owned or controlled by any such Government;

(b)          loans or finance raised by issue of debentures on redeemable capital;

(c)           finance as defined in the Banking Tribunals Ordinance, 1984 (LVIII of 1984) obtained from a banking company or a financial institution;

(d)          advance or application money or subscription for shares in the company;

(e)          security deposits with utility companies;

(f)           security deposits in connection with the execution of contracts;

(g)          earnest- moneys received from tenders;

(h)          rent received in advance from a lessee;

(i)            deposits to undertaken deposit works;

(j)           rent received in advance from a lessee;

(k)          amount received by way of security or an advance from any purchasing agent, selling agent or other agent in the ordinary course of business of the company or an advance received against orders for the supply of goods or properties or for rendering services;

(l)            amount, received from an employee by way of security deposit or contribution toward provident fund;

(m)         amounts received from employees fro payment of annuities or superannuation benefits; and

(n)          amount received from a person who at the time of the receipt of the amount by the company was a director of the company or any amount received by a private company from its shareholders, provided such amount has not been raised from any other person or persons except his spouse and children.

Explanation. For the purpose of this rule, in arriving at the aggregate of the paid-up share capital and free reserves there shall be deducted from the aggregate of the paid-up share capital and free reserves as appearing in the latest audited balance-sheet of the company, the amount of accumulated balance of loss and balance of deferred revenue expenditure, if any, as disclosed in the said balance sheet.

4.            Purpose for which deposits cannot be utilized. No company shall; utilize the deposits received by it for providing financial assistance to any other person.

PART 2B

INFORMATION ON MARKETS

6.            Market definition. 6.1. Identify all reportable markets. Reportable markets consist of all relevant product and geographic markets, as well as plausible alternative relevant product and geographic markets, on the basis of which:

•             two or more of the merger parties are engaged in business activities in the same relevant market (horizontal relationships); or

•             one of more of the Merger parties are engaged in business activities in a product market, which is upstream or downstream of a market in which any other merger party is engaged, regardless of whether there is or is not any existing supplier/customer relationship between the merger parties (vertical relationships).

7.            Information on groups to which merger parties belong. 7.1. Please provide a list of all undertakings active on each reportable market identified in section 6 above, that are controlled, directly or indirectly, by:

•             each of the merger parties; and

•             any other undertaking identified in section 4, specifying the nature and means of control for each undertaking (including any preferential or special rights).

7.2.         With to sections 4 and respect to the merger parties and each undertaking or person identified in response 7.1, please provide:

•             a list of all other undertakings that participate in the reportable markets in which the undertakings or persons of the group hold, individually or collectively, 5% or more of the voting rights, issued share capital or other securities. In each case, also identify the holder and state the percentage held;

•             a list for each undertaking, of the members of their boards of directors (or equivalent) who are also members of the boards of directors (or equivalent) of any other undertakings in the reportable markets. In each case, also identify the other undertaking and the positions held by the members of the boards of directors;

•             a list for each undertaking, acquisitions of undertakings in the reportable markets made during the last three years.

7.3.         Information may be illustrated by the use of organization charts or diagrams to give a better understanding.

8.            Information on markets. 8.1. Provided, for each reportable market:

•             an estimate of the total size of the market in terms of sales value (in Pakistani Rupee) and volume (units), for the preceding year. Indicate the basis and sources for the calculations and provide documents where available to confirm these calculations;

•             the sales in value and volume for the preceding year, as well as an estimate of the market shares, of each of the merger parties. Indicate if there have been significant changes to the sales and market shares for the last three years;

•             an estimate of the market share that the merged entity is likely to have. For completed mergers, provide the sales value and volume and market share before and after completion of the merger; and

•             estimates of the market shares in value (and where appropriate, volume) for the preceding year of the three largest competitors, suppliers and customers, including the basis for the estimates. Provide the name, address, telephone number, fax number and e-mail address of the head of the legal department (or other person exercising similar functions, and in cases where there is no such person, then the chief executive) for these entities.

PART 2C

ADDITIONAL INFORMATION (WHERE APPLICABLE)

9.            Cooperative effects of a joint venture (To be completed if the transaction is a joint venture as defined under the Ordinance). 9.1. Do two or more parent businesses/companies retain activities in the same market as the joint venture or in a market which is upstream or downstream from that of the joint venture, or in a neighboring market closely related to this market?

9.2.         If yes, provide for each of the markets referred to:

•             the activities retained by the parents;

•             the turnover of each parent company in the preceding financial year, and the expected turnover of the joint venture; and

•             the market share of each parent company.

9.3.         If yes, please provide reasons why, in your view, the creation of the joint venture does not lead to coordination between independent undertakings that restricts competition within the meaning of section 4.

10.          Ancillary restrictions (To be completed if ancillary restrictions are included in the notification). 10.1. Provide the following:

•             Details of each ancillary restriction;

•             an explanation as to why each ancillary restriction is directly related and necessary to the implementation of the merger; and

•             an explanation of why each ancillary restriction may infringe the section 4 prohibitions.

10.2.      Please provide copies of each agreement in which the ancillary restriction may be contained.

11.          Any other information. 11.1. Please provide any other information which may be relevant to the application. Supporting documents should be included where relevant.

PART 3

DECLARATION

Under section 38(l)(c) and (d), it is an offence, to provide information which is false or person misleading, if the providing it knows that it is false or misleading, or is reckless as to person is a body whether it is. If corporate, its officers may be guilty of an offence under section tile 38(1 )(c) and (d)

DECLARATION

The undersigned declares and confirms that all information given in the Form and all pages annexed hereto correct to the best of their knowledge and belief, and that all estimates are identified as such and are their best estimates based on the underlying facts.

Signature(s)

Name(s) (in block capitals):

Designation(s):

Date:

PART 4

ACKNOWLEDGEMENT OF RECEIPT

This, acknowledgement of receipt will be returned to the address inserted below if the applicant(s) provides the information requested below:

To be completed by the applicant (s)

To: Name and ac, dress of applicant (s)

Re: The application dated (date of application) concerning (brief description of subject matter) involving the following undertakings: (names of undertakings) and others|

To be completed by the COMMISSION

Received on:

Registered under reference number

Please quote this reference number in all correspondence with the

COMMISSION

PART 5

INFORMATION FOR THE COMMISSION PUBLIC REGISTER TO BE COMPLETED BY THE APPLICANT(S)

1.            Please give the full names of the Applicants.

2.            Please provide a short summary which does not contain any confidential information (not of than 250 words) the description of the merger and the supporting reasons why the merger has not infringed or (where applicable) why the intended merger if carried into effect will not infringe the 11 prohibition. Please note that this summary will be open to viewing by the section public.

3.            Please describe the relevant good(s) or service(s) involved as fully and accurately as possible.

S.R.O. 1189(I)/2007, dated 20.11.2007.—In exercise of the powers conferred by section 56 of the Competition Ordinance, 2007 (the Ordinance) read with sub-section (1) of section 40 thereof, the Competition Commission of Pakistan (the Commission), is pleased to make the following regulations, namely:—

PART I

PRELIMINARY

1.            Short title, commencement and jurisdiction.—(1) These regulations may be called the Competition (General Enforcement) Regulations, 2007.

(2)          They shall come into force at once.

(3)          These regulations shall apply to all such undertakings doing business in Pakistan whether incorporated in Pakistan or not, which commit contravention or are likely to commit contravention of the prohibitions under Chapter II of the Ordinance and any other provisions in relation thereto under the Ordinance or the rules, regulations, directions and orders made there under.

2.            Definitions.—(1) In these regulations, unless there is anything repugnant in the subject or context,—

(a)          "applicant" means a party to a prohibited agreement who have filed an application under regulation 4;

(b)          "application" means an application seeking exemption under these regulations;

(c)           "Chairman" means the Chairman of the Commission appointed  under sub-section (2) of section 14 and includes the Acting Chairman appointed under section 16 thereof;

(d)          "Commission" means the Competition Commission of Pakistan established under section. 12;

(e)          "complainant" means an undertaking or a registered association of consumers filing a complaint or the Federal Government filing a reference under regulation 17;

(f).          "confidential information" means commercial information the disclosure of which would, or might, in the opinion of the Commission, significantly harm the legitimate business interests of the undertaking to which it relates;

(g)          "document" means any matter expressed or described upon any substance by means of letters, figures or marks, or by any other means, used or intended to be used for the purpose of recording that matter;

(h)          "informant" means a person who furnishes information regarding contravention of provisions of the Ordinance of which cognizance is to be taken by the Commission;

(i)           "inquiry officer" means an officer appointed by the Commission to enquire into any matter under these regulations;

(j)           "intervener" means any person or undertaking permitted to intervene by the Commission in any proceedings under these regulations;

(k)          "Ordinance" means the Competition Ordinance, 2007;

(l)            "party shall" include complainant and an undertaking defined in clause (p) of section 2 or the officer concerned of the department of the Commission conducting the relevant case, or any statutory authority, as the case may be, and shall include a respondent or respondents against whom any inquiry or proceeding is instituted or relief is sought to be made and shall also include any person permitted to join the proceedings or an intervener but does not include an informant;

(m)         "person" includes an undertaking;

(n)          "section" means section of the Ordinance;

(o)         "working day" means a day which is not Saturday, Sunday or a public holiday.

(2)          Words and expressions used in these regulations, but not defined herein shall have the meanings assigned in the Ordinance or the rules and regulations prescribed under the Ordinance.

PART-II

Exemption procedures

3.            Who can apply.—(1) An application for grant of individual or block exemption pursuant to sections 5 and 9 shall not be made by any person except a party to the agreement; provided that:

(a)          where the applicant is an individual, by the individual;

(b)          where the application is a company or other body corporate, by a duly authorized officer of that company or body corporate;

(c)           where the applicant is a partnership firm, by a partner of that firm; and

(d)          in case of any other entity, by an authorized representative of such entity.

(2)          If a joint application is made, the application shall be regarded as being made to the Commission by or on behalf of all the applicants, and a joint representative shall be appointed duly authorized to act on behalf of all the joint applicants for the purposes of these regulations.

4.            Form of application for exemption.—(1) Application under these regulations for the exception of any agreement shall be on the Form as provided in the Schedule to these regulations.

(2)          The Commission may, by giving notice to the applicant(s), dispense with the obligation to submit any particular information or document (including any supporting document forming part of the prescribed Form, if it considers that such information or document is unnecessary for examination of the application.

(3)          Where strict compliance with any part of the application is not possible, the Commission may allow that part of the application to be complied with in such other manner as it thinks fit.

(4)          Every application shall be submitted in triplicate, or in such other number, as the Commission may require.

(5)          An application received by the Commission under this regulation shall be recorded in the public register in such manner as the Commission deems expedient.

(6)          No applicant shall make an application under sub-regulation (1) hereof unless it is accompanied by a processing fee amounting to Rs. 100,000 or as may be prescribed by the Commission from time to time. The fee may be paid in the form of bank challan deposited with a n ranch of the authorized bank of the Commission or the bake draft in favour of the Commission.

5.            Power to call for information.—The Commission may call for any information or submission of a document in relation to the grant of exemption.

6.            Power to refuse an application.—-The Commission may refuse an application submitted under regulation 4, if—

(a)          the application is not made in accordance with regulation 4.

(b)          the Commission has reasonable grounds for suspecting that any information submitted to it (whether contained in the application, under regulation 4 or otherwise) is incomplete, false or misleading or omits to state any material information;

(c)           the Commission's direction for any information under regulation 5 is not complied with; or

(d)          the Commission has reasonable grounds to believe that there has been a material change in any information submitted to the Commission (whether as contained in the application, under regulation 4 or otherwise), and such change has not been notified to the Commission.

7.            Power to inquire.—Where the Commission receives an application made under regulation 4 above, the Commission may proceed to decide the matter on the basis of the record made available or it may decide to commence an inquiry in accordance with these regulations.  

8.            Burden of proof.—The applicant desirous of obtaining an exemption under these regulations shall bear the burden of proving that the conditions relating thereto have been satisfied in terms sub-section (2) of section 9.

9.            Exemptions.—(1) The Commission may, subject to such conditions or obligations as it may consider appropriate, grant an individual or block exemption in respect of an agreement if—

(a)          an application for an exemption has been made to the Commission in accordance with regulation 4; and

(b)          the criteria for exemption provided in section 9, are met.

(2)          Before making a block exemption order, the Commission shall notify the proposed order by publishing it in one English and one Urdu national daily newspaper, with a summary thereof, stating:

(a)          brief facts;

(b)          grounds for grant of exemption;

(c)           conditions, if any, to which the exemption shall be subject to; and

(d)          the period for which such exemption is valid.

(3).         The Commission may on an application made in accordance with the Competition Commission (Extension in Exemption) Rules, 2007, extend the period for which an exemption has effect.

10.          Cancellation, variation of exemptions.—(1) Where the Commission has reasonable grounds for believing that there has been a material change of circumstances since the Commission granted an individual exemption or the information on the basis of which an individual exemption was granted was incomplete, false or misleading, it may, by notice in writing proceed in accordance with regulation 38 and pass an order in terms of sub-section (1) or (2) of section 6.  

(2)          Subject to sub-section (3) of section 7, prior to cancellation of the block exemption granted by the Commission, the Commission shall comply with the notice and hearing requirements as provided in regulation 38.

11.          Powers when conducting inquiry for the purposes of an inquiry under regulation 7, the Commission shall have and exercise same powers as provided in regulation 23.

12.          Interim measures.--(l) Where the Commission has reason to believe that:

(a)          an agreement is or has been in existence which may infringe the prohibitions under section 4; or

(b)          the prohibition under section 4 has been infringed but the Commission has not completed the inquiry into the matter, the Commission may for the purposes of-

(i)            preventing serious, irreparable damage to a particular undertaking or category of undertakings, or

(ii)           protecting the public interest, give such directions as it considers appropriate for that purpose.

(2)          Before giving a direction under this regulation, the Commission shall—

(a)          give written notice to the undertaking to whom it proposes to give the direction; and

(b)          give that undertaking an opportunity to make written or oral representations within the time specified by the Commission in this behalf.

(3)          A notice under sub-regulation (3) shall state .the reasons for issuing, the direction.

(4)          Any direction given under this regulation shall have effect while sub-regulation (1) applies, but may subsequently be revoked or substituted by a subsequent direction under regulation

13.          Decisions following an inquiry.—Consequent upon the conclusion of an inquiry conducted under regulation 7, the Commission may proceed to grant or refuse an exemption.

(2)          Before making the decision to refuse the grant of exemption, the Commission shall-

(a)          give written notice to the undertaking likely to be affected by the proposed decision; and

(b)          give that undertaking an opportunity of being heard.

14.          Directions in relation to agreements.—(1) The Commission may give such directions as it may consider appropriate while granting or refusing an exemption including the direction requiring the parties to the agreements-

(a)          to modify the agreement; or

(b)          to terminate the agreement.

(2)          Any direction under this regulation shall be in writing.

15.          Enforcement of Directions.—(1) If ah undertaking fails, without reasonable cause, to comply with a direction under regulation 14, the Commission may—

(a)          require such undertaking to make good its default within the period specified in this behalf; or  

(b)          cancel the exemption in respect of the agreement;

(c)           proceed to impose the penalty in accordance with section 38; or

(d)          initiate proceedings in a Court of competent jurisdiction.

PART III

Enquiries and Adjudications

16.          Inquiry.—(1) Without prejudice to the generality of the powers conferred under section 37 and subject to sub-regulation (2) hereof, the Commission may commence an inquiry:

(a)          suo moto; or

(b)          upon a reference made to it by the Federal Government under regulation 17; or

(c)           on receipt of a complaint from an undertaking or a registered association of consumers under regulation 17.

(2)          The Commission may commence an inquiry upon receipt of a complaint if the facts before it, appear to constitute a contravention of the following provisions:

(a)          prohibition in section 3;

(b)          prohibition in section 4;

(c)           prohibition in section 10;

(d)          prohibition in section 11; or

(e)          any act, omission or facts otherwise available appear to constitute contravention of the provisions of Chapter II of the Ordinance.

17.          Reference and Complaints.—(1) The Commission shall upon a reference made to it by the Federal Government, conduct enquiries into any matter relevant to the purposes of the Ordinance.

(2)          Without prejudice to the foregoing where the Commission receives from an undertaking or a registered association of consumers a complaint in writing, it may, unless it is of opinion that the application is frivolous or vexatious or based on insufficient facts, or is not substantiated by prima facie evidence, conduct an inquiry into the matter to which the complaint relates.

18.          Contents of complaint and reference.—(1) A complaint/reference/application under these regulations shall state-

(a)          name of the person making the complaint/reference/application;

(b)          address in Pakistan for delivery of notice/document;

(c)           telephone number, fax number and electronic mail address, if available;

(d)          mode of service of notice/documents to be used;

(e)          name and address(es) of respondent(s); and

(f)           name and address of authorized representative, if any.

(2)          The complaint/reference/application shall contain-

(a)          a brief statement of facts;

(b)          a summary of the alleged contravention of the Ordinance;

(c)           a succinct presentation in support of each contravention;

(d)          such other particulars as may be specified by the Commission;

(e)          a schedule  listing all documents/affidavits/evidence in support of each of the presentations ; and

(f)           relief(s) sought.

19.          Fee for filing Complaint. Except for the reference filed by the Federal Government, each compliant received under these regulations shall be accompanied by an evidence having paid the fee of Rs. 50,000.

(2)          Fee can be paid either by tendering demand draft or pay order payable in favour of the Commission or challan form evidencing the payment of fee in the account of the Commission.

20.          Power to strike out.—(1) Any vexatious or frivolous complaint, application or request for joinder or intervention, as the case may be, by any person/persons may be dismissed by the Commission. The Commission's decision on the aforesaid applications being frivolous/ vexatious shall be made on the basis of facts and circumstances of each case.

(2)          The Commission may, on an application by a co-respondent or a co-complainant or a co-applicant stating that no relief has been claimed by or against him/her/it or that no relief has to be granted to or against him/her/it, permit the striking out of such person from the proceedings.

21.          Withdrawal of private complaints.—The Commission, may permit the withdrawal of a complaint at any stage of the proceeding but an inquiry or proceeding does not necessarily abate on such withdrawal and may proceed if so decided by the Commission.

22.          Initiation of proceedings under section 30.—(1) Where the Commission on its own or upon filing of the complaint is satisfied, that there has been or is likely to be, a contravention of any provision of the Ordinance, the Commission may issue a show-cause notice stating the reasons thereof to such person as may appear to it to have been or likely to be in contravention.

(2)          If the information available on the record is sufficient to satisfy the Commission that the contravention of any provision of Chapter II has been committed or is likely to be committed the Commission may proceed under sub-regulation (1) above without conducting inquiry under these regulations.

23.          Powers during proceedings.—(1) The Commission shall, for the purpose of any proceedings, investigation or inquiry under these regulations, have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (Act V of 1908), while trying any case, in respect of the following matters, namely:

(a)          Summoning and enforcing the attendance of any witness and examining him on oath;

(b)          discovery and production of any document or other material object producible as evidence;

(c)           accept evidence on affidavits;

(d)          requisitioning of any public record from any Court or office; and

(e)          issuing of a commission for the examination of any witness, document or both.

(2)          The Commission may, for the purpose of an inquiry or during the course of an inquiry, may:   

(a)          call for information from any person for the purpose of satisfying itself, whether there has been any contravention of the provisions of the Ordinance;

(b)          require any person to produce or deliver any document or thing in its custody or under control, deemed useful or relevant to the inquiry and allow any record kept to be examined by an officer of the Commission specified in this behalf; and

(c)           examine any person acquainted with the facts and circumstanced of the case.

(3)          The Commission shall have the power to authorize any officer to enter and search any premises for the purpose of enforcing any provision of the Ordinance.

(4)          For the purpose of sub-regulation (3) above, the Commission may:

(a)          have full and free access to any premises, place, accounts, documents or computer;

(b)          stamp, or make an extract or copy of any accounts, documents or computer-stored information to which access is obtained under clause (a);

(c)           impound any accounts or documents and retain them for as long as may be necessary for the purposes of the Ordinance;

(d)          where a hard copy or computer disk of information stored on a computer is not made available, impound and retain the computer for as long as is necessary to copy the information required; and

(e)          make an inventory of any article found in any premises or place to which access is obtained under clause (a).

(5)          Any officer of the Commission who seeks to exercise the right to enter and search premises shall be required to provide evidence of his authority to act on behalf of the Commission.

(6)          In the event that an undertaking refuses the entry of Inquiry Officer without reasonable cause, forcible entry may be made in terms of section 35.

24.          Termination of Inquiry.—The Commission may terminate the inquiry at any stage and make announcement Of its decision after recording the reasons for doing so, if—

(a)          the complainant does not provide proper cooperation during inquiry;

(b)          the complainant has failed to provide any supplementary materials to the Commission within the time limit set by the Commission; and

(c)           if a complaint is struck down under sub-regulation (1) of regulation 20.

25.          Interim Order.—(1) During the course of inquiry, if the Inquiry Officer is of the opinion that a situation exists or is likely to emerge, which may adversely affect competition in the relevant market and an order is necessary in public interest, it may recommend to the Commission to direct such person to do or refrain from doing or continuing to do any act or thing specified in the order until further order is passed by it, before or after the submission of the final inquiry report.

(2)          The Commission may pass an interim order as it may deem necessary, having regard to the recommendation of the inquiry officer, in accordance with the section 32.

26.          Hearing after submission of Inquiry Report.—(1) Upon receipt of inquiry report where the Commission is satisfied that there has been or is likely to be, a contravention of any provision of Chapter II of the Ordinance, the Commission shall:

(a)          give notice of its intention to make such order stating the reasons therefor to such person as may appear to it to be in contravention; and

(b)          give the person an opportunity of being heard on such date as may be specified in the notice and of placing before the Commission facts and material in support of its contention.

(2)          The hearing convened pursuant to the notice issued under sub-regulation (1) above shall, proceed in the following manner-

(a)          Presentation of case: The parties concerned or their authorized representative shall be asked to present their case and to produce all relevant oral and/or documentary evidences forming the basis for issuance of show-cause notice.

(b)          Filing or reply: The Commission may give the person or undertaking against whom a notice is issued under clause (a) of sub-regulation (1) above for contravention of the provisions of the Ordinance, a reasonable time to present its explanation or arguments in defence, orally or in writing or both, and produce documents in support of its stance, in person or through its authorized representative.

(c)           The Commission in its discretion may call the Inquiry Officer to attend and participate such hearing.

(d)          Adjournment of hearing:

(i)            The Commission, if sufficient cause is shown, may from time to time adjourn the hearing for reasons to be recorded in writing:

Provided that not more than two adjournments shall be given in any case except in exceptional circumstances the nature of such exceptional circumstances shall be duly recorded.

(ii)           All parties or their authorized representatives shall append their signature on a register maintained for this purpose by the officer authorized in this regard by the Commission noting the date of hearing, if re-fixed or on. grant of adjournment, as the case may be, and no separate notice shall be issued to such parties unless a new date of hearing is fixed by the Commission,

(e)          Ex parte order: Where on the day fixed for hearing, including day of hearing re-fixed on adjournment, if any party or parties to the proceeding do not appear even after service of notice or having noted the date, the proceedings shall continue in the absence of such party or parties, not appearing and an ex parte decision shall be made.

27.          Intervener.—(l)Any person may be permitted to intervene and participate, subject to the conditions noted hereunder or as the Commission may deem appropriate, in any proceeding if such person satisfies the Commission that such person has sufficient interest in the outcome of the proceedings.

(2)          A request for intervention shall be accompanied by proof of payment of fees.

(3)          The amount of fee payable by the intervener shall be the same as payable by a complainant in accordance with regulation 19.

(4)          A request for intervention shall contain-

(a)          name of the person making the request;

(b)          address in Pakistan for service of notice/documents;

(c)           telephone number, facsimile number and electronic mail address, if available;

(d)          the mode of service of notice/documents to be used;

(e)          a concise statement of the matters in issue in the proceedings which affect the person making the request; and

(f)           a schedule, listing all documents/affidavit/evidences in support of the statement.

28.          Remedies.—(1) Without prejudice to the generality of the powers conferred upon the Commission under section 31, the Commission may consider any of the following types of remedies, including, but not limited to:

(a)          remedies that are intended to restore all or part of the market structure, such as;

(i)            prohibition of an anticipated merger,

(ii)           divestment of a completed acquisition, and

(iii)          partial prohibition or divestment, and

(b)          remedies that arc intended to increase the competition, such as:

(i)            requiring access to essential inputs/facilities,

(ii)           dismantling exclusive distribution arrangements, and

(iii)          removing no competition clauses in customer contracts, and

(c)           remedies aimed at excluding or limiting the possibility that the merged undertaking will take advantage of the increased market power resulting from the merger to behave anti-competitively or to exploit its customers or suppliers, such as:

(i)            a price cap or other restraint on prices;

(ii)           a commitment to non-discriminatory behavior;

(iii)          an obligation to increase the transparency of prices; and

(iv)         an obligation to refrain from conduct, the main purpose or effect of which is to inhibit entry:

Provided, however, that the remedial action that the Commission may decide to take, will always depend on the facts and circumstances of the case.

(2)          In deciding what an appropriate remedy is, the Commission shall consider the effectiveness of different remedies and their associated costs and may regard to the principle of proportionality.

(3)          In addressing the question of which remedies would be appropriate, and would provide a comprehensive solution as is reasonable and practicable, the Commission may take account of how adequately the action would remedy, prevent or mitigate the  competition concerns.

29.          Assessment of competitive effects of abuse of dominant position.—The Commission in assessing the competitive effects of abuse of dominant position in the relevant market, may consider, the following factors of dominance including, but not limited to, the commonly used measures such as;

(a)          Market share

(i)            Market share of the concerned undertaking and for this purpose may use information from a variety of sources including the main parties, other competitors, customers, buyers, suppliers, trade associations and market research reports.

(ii)           Market share can be measured in terms of revenues, volumes, production capacities or inputs, depending on the markets concerned and the information available.

(b)          Concentration measures

(i)            May generally look at measures of the degree of concentration of the market; provided, however, concentration measures will be indicators of the ability of the leading undertakings in a market to exercise market power collectively.

(ii)           Other competitive constraints will need to be considered before finding that these undertakings have such market power.

(c)           Structural factors

There may be other structural factors which may also provide an indication of current competitive conditions within the market.

(d)          Any other factors

The Commission may have regard to such other factors on case-by-case basis.

(1)          Every company shall before the 31st day of December of each calendar year deposit or invest, as the case may be, a sum which shall not be less than ten per cent of the amount of its deposits maturing during the year ending on the 3i.. day of December next following in any one or more of the following modes, namely –

(a)          in a National Savings Scheme;

(b)          in a special account to be opened by the company for the purpose in a scheduled bank, free from charge or lien;

(c)           in Government securities; or

(d)          in such other securities are notified by the Authority for the purpose.

(2)          The amount deposited or invested, as the case may be, under sub-rule (i), shall not be utilized for any purpose other than for the repayment of deposits maturing during the year referred to in that sub-rule, provided that the amount remaining deposited or invested, as the case may be, shall not at any time fall below ten per cent of the amount of deposits maturing until the 31st day of December of that year.

30.            Obligation of public companies to issue advertisement and provisions relating thereto.- (1) Subject to rule 7, every company intending to invite or allow or cause any other person to invite deposits shall issue an advertisement for the purpose in one daily newspaper in English language and in one daily newspaper in Urdu language circulating in the province in which the registered and other offices of the company are situated.

(2)          No company shall issue or allow any other person to issue or cause to be issued on its behalf any advertisement, inviting deposits unless such, advertisement is issued on the authority and in the name of the Board of Directors of the company and contains a reference to the conditions subject to which deposits shall be accepted by the company, the date on which the said Board of Directors has approved the text of the advertisement, and the matters specified in Form No. l.

(3)          An advertisement issued in accordance with this rule shall be valid until the expiry of six months from the date of closure of the financial year in which it is issued or until the date on which the balance sheet is laid before the company in general meeting, or where the annual general meeting for any year has not been held, the latest day on which that meeting should have been held in accordance with the provisions of the Ordinance, whichever is earlier, and a fresh advertisement shall be made in each succeeding financial year for inviting deposits during that financial year, within a fortnight of expiry of the said period.

(4)          The advertisement referred to in this rule shall not be issued by or on behalf of a company unless before the date of its issue, approval of the Authority to its issue, circulation or publication has been obtained within sixty days preceding the date of its issue and there has been delivered to the registrar concerned for registration a copy thereof authenticated by the chief executive of the company and a majority of the other directors or the Board of Directors of the company as constituted at the time the Board approved the advertisement.

Explanation.- For the purposes of this rule, the date of the newspaper in which the advertisement first appears shall be taken as the date of issue of the advertisement.

31.            Certain provisions to apply to private companies and public companies not issuing advertisement.- The following provisions shall apply to public companies not issuing advertisement and the private companies in addition to the other provisions or conditions laid down in these rules, namely:-

(a)          No private company shall invite or allow or cause any other person to invite deposits from the public whether by issue of an advertisement, public notice or other wise;

(b)          A private company may accept deposits from persons other than its directors or shareholders or their spouses or minor children, provided that the , number of such persons shall not exceed twenty at any time;

(c)           Where a public company intend to accept deposits without issuing an advertisement or private company intends to accept deposits in the manner permissible under these rules, it shall before accepting deposits obtain the approval of the Authority and deliver to the registrar concerned for registration a statement in lieu of advertisement containing all the particulars required to be included in the advertisement by virtue of sub rule (2) of rule 6 authenticated duly in the manner provided in sub-rule (4) of that rule.

(d)          A statement delivered under sub-rule (3) of rule 6 shall be valid until the expiry of six months from the date of closure of the financial year in which it is so delivered or until the date on which the balance sheet is laid before the company in general meeting, or where annual general meeting for any year has not been held, the latest day on which that meeting should have been held in accordance with the provisions of the Ordinance, whichever is earlier, and a fresh statement in lieu of the advertisement shall be delivered to the registrar concerned within a fortnight of expiry of the period.

32.            Form of application for deposits.- (1) No company shall accept or renew any deposit referred to in rule 2 unless an application is made by the intending depositor for the acceptance of such deposit and such application contains a declaration by such person to the effect that the amount is not being deposited out of the funds acquired by him by borrowing or accepting deposits from any other person except his spouse or minor children.

(2)          The application referred to in sub- rule (1) shall be made in the form supplied by the company and such form shall be accompanied by a statement by the company containing all the particulars specified in sub-rule (2) of the rule 6 and incorporating therein all changes in relation to such particulars upto the date on which the form is issued by the company.

33.            Furnishing of receipts to depositor. - (1) Every company shall, on the acceptance or renewal of a deposit, furnish to the depositor or his agent, receipt for the amount received by the company.

(2)          The deposit receipt referred to sub-rule (1) shall be signed by an officer of the company duly authorised by the company in this behalf, and shall state the date of deposit, the name and address of depositor, the amount received by the company as deposit with nature thereof, the rate of return payable thereon and the date on which the deposit is repayable.

34.          Registrar of

 

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