ISLAMABAD (May 26, 2010) – Securities and Exchange Commission of Pakistan Act 2010 will consider destruction of documents by companies as a serious offense in case a person deliberately destroys, falsifies, conceals or disposes of any document which is required during inspection or investigation by the commission.
Sources told reporters here on Tuesday the draft of the Securities and Exchange Commission of Pakistan Act 2010 has proposed a new section 42 (destruction of documents) under the said Act.
According to the proposed provision, a person who destroys, falsifies, conceals or disposes of, or causes or permits the destruction, falsification, concealment or disposal of, any document, which he knows or ought to know is relevant to an inspection or an investigation or in any other proceeding before the Commission under this Act or any Administered Legislation, commits an offence under this Act.
The draft of section 43 (carrying on regulated activity without authorisation) of the Act said that a person who carries on or engages in business in a regulated activity without being licensed or registered by the Commission, or falsely represents itself as a Regulated Person commits an offence, and in addition to any other powers it may have under an Administered Legislation, the Commission may exercise any of its enforcement powers under this Act with regards to such person as if such person was a Regulated Person.
As per proposed section 40 of the Act, where the Commission has reasonable cause to believe, either on its own motion or as a result of information received, that an offence or a contravention has been committed under this Act, or any Administered Legislation or a Subsidiary Legislation; a Regulated Person may have engaged in defalcation, fraud, misfeasance or other misconduct in carrying on a Regulated activity or the manner in which a Regulated Person has engaged or is engaging in his Regulated Activity is not in the interest of the financial services market or investors. The Commission may in writing authorise one or more of its employees or one or more other persons (the “investigator”) to investigate any of the above referred matters and to report the results of the investigation to the Commission.
Any person not being a banking company or a Development Financial institution, who is reasonably believed or suspected by the investigator to have in his possession or under his control any record or document which contains, or which is likely to contain, information relevant to an investigation under this section, or who is believed or suspected of otherwise having such information in his possession or under his control, shall produce to the investigator, within such time and at such place as the investigator requires in writing, any record or document specified by the investigator which is, or may be, relevant to the investigation, and which is in his possession or under his control.
If required by the investigator, give the investigator an explanation for or further particulars of any record or document produced. The said person would attend before the investigator at such time and at such place as the investigator requires in writing, and answer truthfully and to the best of his ability any question relating to the matters under investigation as the investigator may put to him, whether orally or in writing and provide the investigator with all assistance in connection with the investigation which he is reasonably able to give, draft Act said.
A person commits an offence if, without reasonable excuse, he fails to produce any record or document required to be produced. A person commits an offence if he fails to give an explanation or further particulars or he fails to attend before the investigator. A person commits an offence if he fails to answer a question put to him by the investigator or in answering the question says anything which he knows to be false or misleading in a material particular or who in so answering recklessly makes a false statement.
Where the investigation under this section involves a company, the Commission may, in addition to the powers contained in this Act, exercise any of its powers contained in Part VIII of the Ordinance relating to investigation and related matters. The cost of the investigation shall be borne by such persons in such manner as may be prescribed.
As per draft section 41 (powers of the investigator in relation to investigations) of the Act, the investigator shall, for the purposes of investigations, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (Act V of 1908), while trying a suit, in respect of the following matters: It covered summoning and enforcing the attendance of any witness and examining him on oath or affirmation; compelling the discovery or production of any document or other material object; recording statements; receiving evidence on affidavit; issuing commissions for the examination of witnesses and documents and power to seize record. The proceeding before the investigator shall be deemed to be judicial proceeding within the meaning of section 193 and section 228 of the Pakistan Penal Code, 1860 (Act XLV of 1860). Any person who contravenes or fails to comply with any orders or directions of the investigator exercising powers under sub-section (1) commits an offence under this Act, draft The Securities and Exchange Commission of Pakistan Act 2010 added.