SHC orders winding up of Beema Pakistan Company

KARACHI: The Sindh High Court on Friday ordered winding up of Beema Pakistan company and appointed a liquidator to settle the accounts of the company.

The order came on an application filed by Security Exchange Commission of Pakistan which sought to wind up the company and appointment of provisional manager to take the control of company’s affairs. The petitioner counsel submitted that Beema Pakistan Company Limited was a public limited company and during investigation by the SECP it was revealed the management control of the respondent was fraudulently acquired by the existing management under questionable circumstances.

He submitted that respondent was carrying out unlawful and fraudulent activities and it conducted business in a manner oppressive to its members, policy holders, minority shareholders and the investing public. He submitted that company is being managed by people who have failed to maintain proper books of accounts and committed fraud, misfeasance and refused to act in accordance with the requirements of the provisions of the Companies Ordinance and Insurance Ordinance. He submitted that despite giving ample opportunity of hearing, the respondent was unable to submit any satisfactory response to the show cause notice therefore, the SECP passed an order under section 309 of the Companies Ordinance on November 5, 2007 and filed this petition.

The company's counsel submitted that investigation by the petitioner was conducted with malicious intention. He submitted that auditors gave two contrary reports which resulted in their removal by the board. The SHC’s single bench headed by Justice Mohammad Ali Mazhar observed that order passed on the show cause notice unequivocally demonstrates that adequate opportunity was provided to the respondent to defend the show cause notice. The court observed that even during the winding up proceedings, the respondent could neither demonstrate that the SECP proceedings against the respondent were unjust or the grounds raised for winding up do not exist nor could it substantiate with any convincing documentary evidence that the respondent company is a going concern and it has not lost its substratum.

The court observed that respondent has failed to substantiate that it is a going concern seeing that it is not engaged in the insurance business admittedly for last several years. The court observed that grounds raised for winding up petition are very essential and continuance of the company would be prejudicial to the interests of the policy holders. The court ordered winding up of Beema Pakistan and appointed official assignee liquidator to look after the company's record. The court directed the liquidator to submit a report after complying with the formalities.