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SHC orders SECP to probe Al Abbass Sugar Mills affairs

Discussion in 'Pakistan Economy' started by fareedsidra, Nov 28, 2013.

  1. fareedsidra

    fareedsidra FULL MEMBER

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    The Sindh High Court (SHC) has directed the Securities and Exchange Commission of Pakistan (SECP) to ‘conduct a thorough investigation into the affairs of Al Abbass Sugar Mills Ltd’.
    The court also directed the SECP to ‘submit a preliminary report within four weeks from the date of receipt of the order’. The court ordered this ‘in light of the allegations of fraud and mismanagement which appears to be a major grievance of the minor shareholders through the plaintiff’.
    The SHC judge directed the SECP to use its powers under Section 263 of the Companies Ordinance 1984 read in conjunction with Section 29 of the SECP Act, which provides for the ‘superintendence and control of corporate entities’ and ‘protection of investors and creditors’.
    The plaintiff, who is a director on the board of Al Abbass Sugar Mills Ltd alleged in his complaint to the court that the CEO of the company ShunaidQureshi ‘has fraudulently siphoned off Rs 600 million belonging to the company’. The plaintiff also submitted evidence to prove that along with the CEO of Al Abbass, a director by the name of Haji Ghani along with his wife and business GhaniUsman Securities (Pvt) Ltd had fraudulently siphoned off the funds of the company by diverting the same to their personal accounts through multiple sham or bogus transactions including through banking channels, under invoicing etc.
    The plaintiff also pointed out that Haji Ghani ‘being a broker could not directly or indirectly interfere in the management or the affairs of the company including the attendance of the board meetings and/or operation of the bank accounts of the company’.
    While a final decision on the suit is still awaited on multiple prayers such as the removal of the CEO, appointment of a receiver to manage the affairs of the company, the court did rule that Al Abbass Sugar Mills is ‘restrained’ from investing any funds in Javedan Corporation Limited formerly Javedan Cement Limited. Javedan Corporation, the developer of residential scheme NayaNazimabad has recently been in the news due to controversy surrounding cancer causing asbestos pollution in the area NayaNazimabad is being built.
    There are also concerns that its land allocation or leases and planning approval were done illegally during the last government tenure and hence NayaNazimabad may be an illegal development. Inside sources claimed that Al Abbass Sugar Mills was being manipulated to invest in JCL as ShunaidQureshi and Haji Ghani also had significant share holdings in JCL.