CORPORATE AND INDUSTRIAL RESTRUCTURING CORPORATION
20th January, 2001
In exercise of the powers conferred by Section 30 of the Corporate and Industrial Restructuring Corporation Ordinance, 2000 (L of 2000), the Federal Government is pleased to make the following rules, namely:-
1. Short title and commencement.- (1) These rules may be called the Corporate and Industrial Restructuring Corporation Rules, 2001.
(2) They shall come into force at once.
2. Definitions.-(1) In these rules, unless there is anything repugnant in the subject or context:-
(a) 'Anniversary date' means the date which is one year from the date of the execution of a Transfer and Assignment Agreement between a financial institution and the Corporation pursuant to Rule 15;
(b) 'Appendix' means the Appendix to these rules;
(c) 'Disclosed claims' means any claim, pending or threatened, subject to all defences and disclosed to the Corporation in writing prior to transfer date;
(d) 'Disclosed obligations' means an obligation or liability owed to an obligor by a financial institution under or with respect to a non-performing asset and which obligation or liability and its accompanying defences is disclosed by the financial institution to the Corporation in writing prior to transfer date.
(e) 'Member' means a member of the Board;
(f) 'Ordinance' means the Corporate and Industrial Restructuring Corporation Ordinance, 2000 (L of 2000);
(g) 'Privatization' with respect to a financial institution, means the sale of whole or part of an equity or a beneficial interest in, and transfer of management and control of such financial institution to any entity that is not a Government entity;
(h) 'Registered interests' means any right to interest in a non-performing asset duly registered under the Companies Ordinance, 1984 (XLVII of 1984), or its predecessor statute or under any other law for the time being in force;
(i) 'Transfer date' means the date of transfer set out in a transfer letter;
(j) 'Transfer letter' means a letter issued under rule 15; and
(k) 'Verification Committee' means the verification committee established under Section 10 of the Ordinance.
(2) The words and expressions used in these rules but not defined shall have the same meaning as in the Ordinance.
3. Remuneration.- The pay and allowances admissible to the Chief Executive and members of the Corporation appointed on a contract basis shall be governed by the package determined by the Finance Division, Government of Pakistan (Package MP-1, MP-2 and MP-3).
MEETINGS OF THE BOARD OF DIRECTORS
4. Meetings.- The Board shall meet at least once in every quarter for the dispatch of business and may adjourn and otherwise regulate its meetings and proceedings as it thinks fit.
5. Minute Book.- The Board shall cause to be recorded, in books provided for the purpose, the minutes of the proceedings of all meetings of the Board together with the names of the directors present at such meetings.
6. Notice period.- Ordinarily not less than four clear day's notice shall be given of each meeting of the Board of notice of this alongwith the agenda for the meeting shall be sent to every director at his registered address. Should the presiding officer consider it necessary to convene an emergency meeting, a short notice of twenty-four hours shall be given to every director.
7. Business.- No business other than that for which the meeting is convened shall be discussed at a meeting of the Board except with the permission of the presiding officer. The items of the agenda may be discussed by the directors in any order they like.
8. Minutes of meetings.- A copy of the proceedings of every meeting of the Board duly signed by the presiding officer shall be circulated as soon as possible after the meeting for the information of all the directors and the minutes so circulated shall be again signed by the presiding officer at the next succeeding meeting after their final adoption with amendments or otherwise. All minutes purporting to be so signed shall, for all purposes, constitute prima facie evidence of the actual passing of any resolution recorded and the actual passing of any transaction or occurrence of any proceedings so recorded and of the regularity of a meeting-
9. Fees for directors' meetings.- (1) A director other than an ex officio director shall be paid a fee as may be approved by the Board for each meeting of the Board which he attends, and for attending a meeting of any committee of which he is a member.
(2) There shall also be paid to a director other than an ex officio director, a business class air passage from his usual place of residence to the place of meeting and back. A daily amount as may be approved by the Board shall also be paid for miscellaneous expenses if he comes to attend meeting of the Board or meeting of any committee to which he belongs from outside the town where the meeting is actually held.
10. Meetings of Administration Committee.- Except Rule 9, all rules relating to meetings of the Board shall also apply, mutatis mutandis, to meetings of the Administration Committee.
DECLARATION BY DIRECTORS AND MEMBERS
11. Declaration by directors and members.- Every director and member shall affirm that he complies with the provisions of sub-section (1) of Section 6 of the Ordinance by signing the form of the affirmation as set out in Appendix I.
12. Recruitment Policy.- The Corporation shall, with the prior consent in writing of the Board, formulate its recruitment and employment policy.
TRANSFER OF NON-PERFORMING ASSETS
13. Selection letter.- The Corporation shall issue to the financial institution a selection letter, as nearly as possible, in the form as set out in Appendix-II, informing if of its selection in the program of the Corporation and requiring it to fill in the Documentation Checklist attached thereto for further processing.
14. Financial institution documentation.- Upon issuance of a selection letter under rule 13, the concerned financial institution shall provide full support and assistance in the provisions of documentation to the Corporation including details of disclosed obligations, disclosed claims, registered interests, pending or threatened litigation through disclosure of all cases and the Courts in which such litigation is pending, amount of finance or loan pertaining to the non-performing assets granted by the financial institution to the obligor and the collateral therefor held by the financial institution and part payments of the finance or loan made by the obligor to the financial institution. Such information and documents shall be provided to the Corporation by the financial institution within thirty days of the receipt of such letter.
15. Transfer letter.- Upon the final recommendations and findings by the Governor State Bank based on the findings, report and the recommendations of the Verification Committee or in accordance with the provisions of sub-section (14) of Section 10 of the Ordinance, the Corporation shall issue to the financial institution a transfer letter for the transfer to the Corporation of the non-performing assets that are on the books of the financial institution whether such non-performing assets are held by the financial institution along or jointly with other institution or institutions as of a date specified in the transfer letter. The form of the transfer letter shall, as nearly as possible, he as set out in Appendix III.
16. Handing over of original documents.- On the issuance of a transfer letter under rule 15, the concerned financial institution shall, within fourteen days of the transfer date, hand over all original documents and files, including the collateral and a statement of account prepared up to the date of the transfer of the non-performing assets which shall be duly verified under oath by the concerned authorized official of the financial institution.
CONSIDERATION FOR NON-PERFORMING ASSETS
17. Payment.- The Corporation shall pay, in the manner specified in rules 18 and 19, to the concerned financial institution the outstanding amount as consideration for the transfer of the non-performing assets.
18. Privatization of financial institution.- In the event that privatization of a financial institution is effected prior to the third anniversary date, the Corporation shall:-
(a) Pay to the financial institution on the date of privatization of such financial institution an amount equal to the net proceeds realized, if any from the non-performing assets until the date of such privatization; and
(b) Issue a bond to the financial institution on the date of privatization of the financial institution for the difference between the outstanding amount and the net proceeds realized, if any, until the date of such privatization as reduced by the recovery fees and such other determined amounts.
19. Non-privatization of financial institution.-In the event that privatization of a financial institution is not effected prior to the third anniversary date, the Corporation shall:–
(a) Pay to the financial institution on the third anniversary date an amount, equal to the net proceeds realized, if any, from the non-performing assets till such third anniversary date; and
(b) Issue a bond to the financial institution on the third anniversary date for the difference between the outstanding amount and the net proceeds realized, if any, until the third anniversary date as reduced by the recovery fees and such other determined amount.
Explanation.- For purposes of rules 18 and 19 net proceeds with respect to any non-performing assets means the proceeds realized by the Corporation from any sale, lease or other disposition or financing of such non-performing assets less recovery fees to be retained by the Corporation and such other determined amounts.
20. Bonds.- Any bond issued under rules 18 and 19 shall bear return or profit from the date of the bond at a rate and have a repayment schedule as may be determined by the Federal Government, subject to a five years cut off period.
(See rule II)
The Board of Directors,
Corporate and Industrial Restructuring Corporation,
92-A/D-I. Main Boulevard Gulberg-II,
Pursuant to sub-section (5) of Section 6 of the Corporate and Industrial Restructuring Corporation, 2000 (L of 2000), read with Rule 11 of the Corporate and Industrial Restructuring Corporation Rules, 2001, I ___________ affirm that I do not have any direct or indirect financial interest in, or have business connection with any obligor or financial institution whose non-performing assets are the subject aforesaid Ordinance. 1 undertake to inform the Board forthwith if in future, I develop any direct or indirect financial interest in, or have business connection with any obligor or financial institution whose non-performing assess are the subject of the aforesaid Ordinance. Very truly yours
(See rule 13)
(On the Corporation Letterhead)
(Name and address of financial institution
ATTN: Chief Executive)
Re: Official Notice of Selection for Participation in Corporate and Industrial Restructuring Corporation Rehabilitation Programme.