Capital Issues (Continuance of Control) Act, 1947

Capital Issues (Continuance of Control) Act 1947

Sections	Contents
	Preamble
1	Short title extent and duration
2	Definitions
3	Control over issue of capital
4	Control over prospectuses and other advertisement
5	Purchase and sale of securities
6	Power to exempt and to condone contraventions
7	Power to call for information
8	False statement
9	Prohibition against disclosing information
10	Power to delegate function
11	Committee to advise Government
12	Power to make rules
13	Penalties
14	Burden of proof in certain cases
15	Protection of action taken under act
16	Continuance of existing orders and savings

 Capital Issues (Continuance of Control) Act 1947
Act XXIX OF 1947

19th April, 1947

An Act to provide for the continuance of control over issues of Capital

Preamble: Whereas it is expedient to provide for the continuance of control over issues of Capital;

It is hereby enacted as follows.

1. Short title extent and duration. (1) This Act may be called the Capital Issues (Continuance of Control) Act, 1947.

(2) It extends to the whole of Pakistan and applies to all citizens of Pakistan wherever they may be.

2. Definitions: In this Act.

(a)      ‘Issue of capital’ means the issuing of any securities whether for cash or otherwise;

(b)      ‘Securities‘ means any of the following instruments issued or to be issued, by or for the benefit of a company whether incorporated in Pakistan or not, namely:

(i)       shares, stock, [Modaraba Certificates, Mutual Fund Certificates & trust Union] ;

(ii)      debentures, [Lands and Participation Terms Certificates];

(iii)     other instruments creating a charge or lien on the assets of the company;

(iv)     instruments acknowledging loan to or indebtedness of the company and guaranteed by a third party or entered into jointly with a third party and

(v)      any other instrument, specified by the Federal Government, by Notification in the official Gazette to be a security for the purpose of this Act,

3. Control over issue of capital. (1) No company incorporated in Pakistan shall, except with the consent of the Federal Government, make an issue of capital outside Pakistan.

(2)      No company, whether incorporated in Pakistan or not, shall except with the consent of the Federal Government-

(a)      make an issue of capital in Pakistan,

(b)      make in Pakistan any public offer of securities for sale.

(c)      renew or postpone the date of maturity of repayment of any security maturing for payment in Pakistan.

(3)      The Federal Government may on application make an order according recognition to an issue of capital made or to be made outside Pakistan.

(4)      Notwithstanding anything contained in the Companies Act, 1913 (VII of 1913), or in any other law for the time being in force, or in any contract or the articles or memorandum of association of any Company, any consent or recognition accorded under sub-section (2) or under sub-section (3), whether before or after the commencement of this sub-section, shall be subject to such conditions as the Federal Government may if it is of opinion that it is necessary so to do in the public interest or in the interest of the company, impose from time to time.

(4-A)  In particular and without prejudice to the generality of the foregoing power, such conditions may relate to the nature, valuation and manner of disposal of securities, issue of prospectus, brokerage and underwriting commission, listing of securities, quorum of meetings, qualification of directors, management expense or managerial remuneration, valudation of assets including depreciation, and distribution of cash and stock dividend.

(5)      Where an application for the consent or recognition of the Federal Government under any of provisions of this section is refused, the Federal Government shall, upon the request of the applicant communicate to him in writing the reasons for such refusal.

4. Control over prospectuses and other advertisement. No person shall issue in Pakistan any prospectus or other document offering for subscription or publicly offering for sale any securities which does not include a statement that the consent or recognition, as the case may be, of the Federal Government has been obtained to the issue or offer of the securities, and no person shall without the consent of the Federal Government issue in Pakistan any document publicly offering for sale any security issued with the consent or recognition of the Federal Government if such issue was made by a private company or if the order according its consent or recognition contained a condition that the securities should be privately subscribed.
5. Purchase and sale of securities. (1) No person shall accept or give any consideration for any securities in respect of an issue of capital made or proposed to be made in Pakistan or elsewhere unless the consent or recognition of the Federal Government has been accorded to such issue of capital.

(2)      No person shall sell or purchase or otherwise transfer or accept transfer of any securities issued by a company in respect of any issue of capital made after the 17th day of May, 1943 in Pakistan or elsewhere unless such issue has been made with the consent or recognition of the Federal Government.

6. Power to exempt and to condone contraventions. (1) The Federal Government may, by general order which shall be notified in the official Gazette, provide for the granting of exemption from all or any of the provisions of Sections 3, 4 and 5.

(2)      The Federal Government may by order condone a contravention of any of the provisions of Section 3 or Section 4, and on the making of such order the provisions of this Act, shall have effect as if an exemption had been granted under sub-section (1) of this section in respect of the thing done or omitted to be done in contravention of Section 3 or Section 4, as the case may be.

7. Power to call for information. Any officer authorised in this behalf by the Federal Government may, for the purpose of enquiring into the correctness of any statement made in an application for consent or recognition to an issue of capital or for the purpose of ascertaining whether or not the requirements of any condition attached to an order according such consent or recognition have been complied with, require any company, or any officer of a company, which has made such application or obtained such order to submit to him such accounts, books or other documents, or to furnish to him such information, as he may reasonably think necessary.
8. False statement. No person shall, when complying with any requisition under Section 7 or when making any application for consent or recognition to an issue of capital, give nay information or make any statement which he knows, or has reasonable cause to believe, to be false or not true in any material particular.
9.        Prohibition against disclosing information. No person who obtains any information by virtue of this Act shall otherwise than in connection with the execution of the provisions of this Act or of any order made in pursuance thereof, disclose that information to any other person except with the permission of the Federal Government.
10. Power to delegate function. The Federal Government may by order direct that any power or duty which by or under any of the preceding provisions of this Act is conferred or imposed upon the Federal Government shall in such circumstances and under such conditions, if any, as may be specified in the direction, be exercised or discharged by any officer subordinate to that Government or to a Provincial Government.
11. Committee to advise Government. The Federal Government ‘shall, by notification in the official Gazette, constitute an Advisory Committee consisting of not more than five members, and may from time to time refer to it for advice any such matters ‘arising out of the administration of this Act as the Federal Government may think fit.
12. Power to make rules. The Federal Government may by notification in the official Gazette make rules for carrying out the purpose of this Act.
13. Penalties. (1) Whoever contravenes, or attempts to contravene, any of the provisions of this Act or of any conditions imposed or any order made thereunder shall be punishable with imprisonment for a term which may extend to one-year or with fine or with both.

(2)      If the person committing an offence punishable under this section is a company or other body corporate, every director, manager, secretary other officer thereof shall, unless he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent its commission, be deemed to be quality of such offence.

14. Burden of proof in certain cases. Where any person is prosecuted for contravening any provision of this Act or of any order made thereunder which prohibits him from doing an act without the consent or permission of any authority the burden of proving that he had the requisite consent or permission shall be on him.
15. Protection of action taken under act. No suit, prosecution or other legal proceedings shall lie against any person for anything in good faith done or intended to be done under this Act or any rule or order made thereunder.
16. Continuance of existing orders and savings. (1) All orders made or deemed to be made under provisions of the Capital Issues (Continuance of Control) Ordinance, 1947, and in force immediately before the commencement of this Act shall continue to be in force and be deemed to be orders made under the corresponding provision of this Act.

(2)      Section 6 of the General Clauses Act, 1987, shall apply upon the expiration of the said Ordinance as if it had then been repealed by this Act.