RECORDER REPORT

ISLAMABAD: Finance Minister Ishaq Dar has called for early promulgation of the new company law for which he suggested that sub-committees of both Houses of the Parliament should sit together for early finalisation of the Companies Bill 2016.

This was informed by Ishaq Dar to the sub-committee of National Assembly Standing Committee on Finance that was established to consider the Companies Bill 2016.

The finance minister, who too attended the meeting, called for early enforcement of the new company law which will replace more than a 32-year-old law.

He said the new areas being introduced through the new company law include a global register of beneficial ownership, which has been a cause of concern for the stakeholders. However, pursuant to the Panama Leaks issue, there has been a movement globally to regulate the beneficial ownership area and a number of countries, including the UK, have undertaken a legislation in this area. Barring a few concerns, the promulgation of the Companies Ordinance, 2016 was duly appreciated by majority of the stakeholders.

He stated that law would also deal with the issue of offshore investments and the Securities and Exchange Commission of Pakistan (SECP) had already issued notices to around 77,000 companies registered in Pakistan to build a global register of beneficial ownership.

"The notices were issued by the SECP when the Ordinance was in place, though the process has been stopped but has given the message to beneficial owners of offshore investments that Pakistan is serious in this regard," he said.

Dar also said that a number of countries, including the UK, have undertaken legislation in this area.

The finance minister said the new law has been finalised after thorough research of various international jurisdictions, use of technology and keeping in view international best practices. He informed the committee members that before finalisation, a comprehensive and exhaustive consultative process with the stakeholders has been done.

The minister stated he had held several meetings with SECP on weekends to ensure timely finalisation of all new concepts introduced in the law.

The finance minister told the committee that he has advised SECP to bring before the committee all concerned proposals and suggestions from press and professional circles for further improvement of the law. He said the committee should consider all these comments with an open mind so that the new law yields maximum fruits in the matters of ease of doing business, good governance and development of corporate sector.

During the meeting, the National Assembly body formed to discuss the Companies Bill 2016 suggested that there is a need to regulate the real estate sector and the companies bill contained the provisions in this regard.

The sub-committee of National Assembly Standing Committee on Finance was established to consider the Companies Bill, 2016.

The sub-committee headed by Daniyal Aziz along with Mian Abdul Mannan belonging to the PML-N, while other two members are Asad Umar of PTI and Syed Naveed Qamar of PPP.

The committee discussed various objections and public suggestions over the Companies Bill 2016, and it was noted that the provisions related to real estate sector could lead to a serious slump in the reality sector.

The sub-committee was informed that under the Companies Bill 2016, the SECP was empowered to seek details of beneficial owners of foreign companies operating in the country.

Since the both the members of opposition parties did not attend the meeting, the discussions remained soft and focused on the explanations by the SECP only.

Responding to this, Chairman of the sub-committee Daniyal Aziz expressed concerns that the stringent measures and requirements in the companies bill would discourage the real estate companies.

Chairman SECP Zafar Hijazi responded that the benefit of strict regulation would be that the chances of fraud with the public and investors would minimise.

"If any real estate company introduces a project that is registered with the SECP than the general public will have the confidence that all deals will be fair in that project," he said adding, "otherwise the real estate projects can be launched through local and provincial laws too."

The sub-committee has issued invitation to Dr Nafisa Shah as special invitee as Naveed Qamar has expressed inability to attend the meetings.

After it is reviewed by the sub-committee, the Companies Bill 2016 will be taken up by the main NA Standing Committee on Finance.