The Securities and Exchange Commission of Pakistan (SECP) has closed down the proceedings against the Nazir Cotton Mill limited on the basis that it has taken necessary measures for the revival of operations.
The adjudication department of SECP, after the six years in its decision, stated that the company has changed its principal line of business such as from textile to setup/operate the business of cattle rearers, sheep farmers, poultry, which was approved by the shareholders in Extra-Ordinary General Meeting held on May 16, 2020.
The company reported Rs. 8.5 million and Rs. 11.3 million sales in quarterly financial statements ended on December 31, 2020, and March 31, 2021, respectively.
The head of adjudicating department stated that the respondents have taken necessary measures for the revival of operations of the company.
“Keeping in view the facts, I am of the view that granting sanction to file winding-up petition at this juncture, may not be in the interest of the members of the company. Moreover, business of the company has shown revival through dairy business sales, which have resulted in the resumption of the operations by the company.”
“I have observed that the basic premise of the SCN, i.e., suspension of business of the company has been addressed. I, therefore, find no reason to continue the winding-up proceedings initiated against the company and hereby drop the said proceeding with no further action,” he added.
It is pertinent to mention that SECP had started proceedings through the SCN initiated against the company on the grounds that the company had suspended its business for more than six years.
The company was incorporated on March 28, 1974, under the then Companies Act, 1913 (now the Companies Act 2017 “the Act”). The company is listed at the Pakistan Stock Exchange (PSX), and the Principal business of the company was manufacturing, selling, buying, and dealing in all types of yam.
As per available information, the company’s business has been suspended since 2009. In terms of clause (c) of Section 305 of the Ordinance, a company may be wound up by the Court if the company’s business remains suspended for a whole year.
The Company Registration Office (CRO) had approached for grant of sanction in terms of clause (b) of Section 309 of the Ordinance read with clause (c) of Section 305 thereof to present a petition before the High Court for winding up of the company on the grounds that the company had suspended its business for more than six years.