KARACHI: The government has bound shareholders of local firms to furnish financial data about their offshore investments under the newly enacted corporate law, said an accountancy firm.
Chartered accountants firm Ernst & Young Ford Rhodes, in a report, said every ‘substantial shareholder’ or officer of a company incorporated in
Pakistan – who is also a citizen, including dual citizenship holders, whether or not residing in the country – is obliged to report shareholding or any other interest in a foreign company or body corporate under Companies Act 2017.
A substantial shareholder is an individual having interest in shares of a company equal or more than 10 percent of the issued share capital of the company.
The accountancy firm said the companies would submit the details provided by substantial shareholders. “Company shall file the same with the commission (Securities and Exchange Commission of Pakistan) through annual return,” it added.
In May, President Mamnoon Hussain signed Companies Act 2017, which was implemented from the same date.
The chartered accounts firm said another significance of the corporate law is
that every officer of a company is required to intimate the commission of any fraud, offences of money laundering, including predicated offences as provided in the Anti-Money
Laundering Act 2010 with respect to affairs of the company.
“The officer is required to take adequate measures for the purpose,” it added.
In case of failure to comply with the provisions of this section, the official will be liable to punishment of imprisonment for a term, which may extend to three years and with
fine, which may extend to Rs100 million, said the accountancy.
The chartered account firm further said the concept of Shariah business model has been provided in the new company law to promote Islamic finance in the country.
“No company shall be called a Shariah compliant company unless it has been declared Shariah-compliant in such form and manner as may be specified by the commission,” it added.
No individual can claim that a security, whether listed or not, is Shariah-compliant, unless it has been declared Shariah compliant in such form and manner as may be specified by the commission, according to the corporate law.
Besides, no individual can be appointed or engaged for Shariah compliance, advisory or audit unless the individual meets the fit and proper criteria and fulfills such terms and conditions as may be specified by the commission, according to the accountancy firm.
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