Section 27: Power of Registrar and Authority to call for information or appoint inspectors

27. Power of Registrar and Authority to call for information or appoint inspectors.—(1) Nothing contained in this Act shall be construed to impose any limits on the powers of the Registrar or the Authority under the Companies Ordinance, 1984,(XLVII of 1984), as regards calling for any information from and appointing any persons as inspectors to investigate the affairs of a central depository or of any participant which is a company or is corporation to which the provisions of the Companies Ordinance, 1984,(XLVII of 1984), apply. (2) Nothing contained in this Act shall be construed to impose any limits on the powers of any competent authority under any other law for the time being in force as regards calling for any information from or carrying out any investigation into the affairs of a participant which is established under, or is otherwise governed by, such law. (3) The Authority, on being satisfied that the affairs of a participant, not being a participant referred to in sub­sections (1) of (2), in relation to his account on a central depository system are being or have been conducted with intent to defraud his creditors or any other persons or for a fraudulent or unlawful purpose, may by order in writing,— (a) call upon such participant to furnish in writing such information relating to book­entry securities held by him on the central depository register, whether on his own behalf or on behalf of a client; or (b) authorise any one or more competent persons as inspectors to investigate the affairs of such participant: Provided that before making an order for enquiry or inspection, the Authority shall give, the participant an opportunity to show cause against the action proposed to be taken. (4) A person appointed as inspector under sub­section (3) shall, for the purposes of his investigation, 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, namely :— (a) enforcing the attendance of persons and examining them on oath or affirmation; (b) compelling the discovery and production of books and papers and any material objects; and (c) issuing commissions for the examination of witnesses; and every proceeding before such person shall be deemed to be “judicial proceeding” within the meaning of sections 193 and 228 of the Pakistan Penal Code, 1860, (Act XLV of 1860). (5) Any contravention of or non­compliance with any orders, directions or requirement of the inspector exercising powers of a court under sub­section (4) shall, in all respects, entail the same liabilities, consequences and penalties as are provided for such contravention, non­compliance or default under the Code of Civil Procedure, 1908, and the Pakistan Penal Code, 1860. (6) Every past and present partner, proprietor or employee of a participant shall on demand produce before inspector all information or such records and other documents in his custody having a bearing on the subject­matter of the investigation. (7) The inspector may, and if so directed by the Authority shall, make interim reports to the Authority, and on the conclusion of the investigation, shall make a final report to the Authority on the basis of which it may take such action as it deems expedient. (8) If, from any report made under sub­section (7), it appears to the Authority that any participant on any other person has been guilty of any offence for which he is criminally liable, the Authority may prosecute such participant or other person for the offence. (9) When an investigation is ordered to be made under this section, the expenses of the investigation shall, in the first instance be defrayed by the Authority; but any person who is convicted on a prosecution instituted in pursuance of sub­section (8) may, in the same proceedings, be ordered to pay the said expenses to such extent as may be specified by the Authority or as the court may so direct. (10) The amount of expenses which any person is liable under this section to reimburse to the Authority shall be recoverable from that person as arrears of land revenue. (11) In so far as the expenses to be defrayed by the Authority under this section are not recovered thereunder, those shall be borne by the Federal Government. (12) A copy of any report of any inspector or inspectors appointed under this section authenticated in such manner as may be prescribed, shall be admissible in any legal proceedings as evidence of the opinion of the inspector or inspectors in relation to any matter contained in the report.

Effective date: 1997-01-01

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