The Securities and Exchange Commission of Pakistan (SECP)Commissioner(Insurance) Mohammad Asif Arif has issued a stern warning to the Jubilee life Insurance Company limited for making investment in the shares/securities of an associate concern/undertaking without prior approval of the shareholders through a special resolution. In this regard, the SECP has issued an order against the insurance company under section 208 of the Companies Ordinance 1984.
According to the SECP order, the commissioner Insurance issued a stern warning to the Chief Executive and Directors of Jubilee life insurance Company that in case of similar non complince in future a stronger action against the company will be taken.The SECP said the Directors are gauged through a higher standard of accountability which requires them to be vigilant and perform their duties with due care. In the instant case, however, the directors have failed to perform their duties with due care and prudence.
As the directors are supposed to be well aware of their legal obligations in connection with the aforesaid statutory requirement of Section 208 of the Ordinance ie the Directors of the Company were required to obtain prior approval of the shareholders of the Company through a special resolution before making any investment (either for the first time or subsequently beyond the already approved limit for making such investment) in the shares/securities of an associated concern /undertaking.