Takeover Ordinance 2002

GOVERNMENT OF PAKISTAN

MINISTRY OF LAW, JUSTICE, HUMAN RIGHTS AND

PARLIAMENTARY AFFAIRS

(Law, Justice and Human Rights
Division)

Islamabad , the 29th
October, 2002

F. No. 2(1)/2002-Pub.-
The Following Ordinance promulgated by the President is
hereby published for

general information:
-

ORDINANCE NO. CIII OF 2002

AN

ORDINANCE

to provide for substantial
acquisition of voting shares and take-overs of listed

companies WHEREAS it is expedient to provide for a fair and equal treatment
to all the investors as well as a transparent and efficient system for
substantial acquisition of voting shares and take-overs of listed companies
and matters ancillary thereto or connected therewith; AND WHEREAS the
President is satisfied that circumstances exist which render it necessary
to take immediate action; NOW, THEREFORE, in pursuance of the Proclamation
of Emergency of the fourteenth day of October, 1999, and Provisional Constitution
Order No. 1 of 1999, read with the Provisional Constitution (Amendment)
Order No. 9 of 1999, and in exercise of all powers enabling him in that
behalf, the President of the Islamic Republic of Pakistan is pleased to
make and promulgate the following Ordinance: —

CHAPTER I. — PRELIMINARY

1. Short title, extent
and commencement. —

(1) This Ordinance may be
called the ListedCompanies (Substantial Acquisition of Voting Shares
and Take -overs) Ordinance, 2002.

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(2) It extends to the whole
of Pakistan.

(3) It shall come into force at once.

2. Definitions. —

(1) In this Ordinance, unless there is anything repugnant
in thesubject or context,-

(a) “acquirer” means any person
who, directly or indirectly, acquires orhas proceeded to acquire voting
shares in the target company, or acquires or has proceeded to acquire
control of the target company, either by himself or through any person
acting in concert;

(b) “Commission” means the Securities and Exchange Commission of Pakistan
established under the Securities and Exchange Commission of Pakistan
Act, 1997 (XLII of 1997);

(c) “control” includes the right to appoint majority of directors
or to control management or policy decisions, exercisable by a person
individually or through any person acting in concert, directly or
indirectly, whether by virtue of his shareholding, management right,
shareholders agreement, voting agreement or otherwise;

(d) “financial institution” means an institution, other than a banking
company as defined in the Banking Companies Ordinance, 1962 (LVII
of 1962), notified as such by the Commission either specifically or
generally and shall include such other institutions or companies notified
by the Federal Government as financial institutions;

(g) “listed company” means a company or a body corporate whose voting
shares are listed on a stock exchange;

(h) “manager to the offer” means a manager appointed under section
7;

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(i) “offer period” means
the period from the date of public announcement of public offer to
the date of closure of public offer or earlier withdrawal thereof;

(j) “person acting in concert” means a person who co-operates with
the acquirer to acquire voting shares or control of the target company;

(k) “prescribed” means prescribed by rules made under this Ordinance;

(l) “promoters” means persons who are in control of a company or named
in any offer document and includes—

(a) any relative of a promoter; and

(b) in case of a company or body corporate,—

(i) a subsidiary or holding
company of such company or body;

(ii) any company in which the promoter holds ten per cent or more
of the equity capital or which holds ten per cent or more of the
equity capital; or

(iii) any company or body corporate wherein a group of individuals
or companies or bodies corporate or combinations thereof holds twenty
per cent or more of the capital in the target company and also holds
twenty percent or more of the capital of the promoter; and

(c) in case of an individual, —

(i) any company in which ten per cent or more of the share capital
is held by the promoter or a relative of the promoter or a firm
or Hindu undivided family in which the promoter

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or his relative is a partner or co-partner or a combination thereof;
or

(ii) any company in which a company specified in paragraph

(i) holds ten per cent or more of the share capital;

(m) “public announcement” means public announcement of offer or intention
to be made under section 5, section 6 or section 8, as the case may
be, and includes any announcement of any competitive bid for acquisition
of voting shares of a target company;

(n) “public offer” means the public offer for acquisition of voting
shares of a target company and includes any competitive bid or bids
made for this purpose;

(o) “relative” means spouse, lineal ascendants and descendents;

(p) “voting shares” mean the shares in the share capital of a listed
company having voting rights; and

(q) “target company” means a listed company whose voting shares or
control are directly or indirectly acquired or intended to be acquired.

(2) All other expressions used but not defined herein shall have the
same meanings as are assigned to them in the Securities and Exchange
Ordinance, 1969(XVII of 1969), or the Companies Ordinance, 1984 (XLVII
of 1984).

3. Ordinance not to apply
to certain transactions.
— Nothing
contained in this Ordinance shall apply to—

(a) allotment of voting shares
in pursuance of a pre-public issue or public issue;

(b) allotment of voting shares pursuant to a right issue;

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(c) allotment of voting
shares to the underwriters pursuant to any underwriting agreement;

(d) acquisition of voting shares in the ordinary course of business
by banks and financial institutions as enforcement of security;

(e) acquisition of voting shares by succession or inheritance;

(f) transfer of voting shares from financial institutions, including
their subsidiaries, to co-promoters of the company pursuant to an
agreement between such financial institution and such co-promoters
provided proper disclosure has been made in the prospectus at the
time of issue;

(g) a scheme of arrangement or reconstruction including amalgamation
or merger or de-merger under any law for the time being in force;

(h) acquisition of voting shares in companies whose voting shares
are not listed on any stock exchange;

(i) exercise of option by a bank or a financial institution in pursuance
of a conversion option;

(j) sale of shares in consequence of privatization of a unit or its
management rights within the meaning of Privatization Commission Ordinance,
2000 (LII of 2000);

(k) sale of shares in consequence of any on-going negotiations
on the commencement of this Ordinance provided that the negotiations
are finalized and agreement reached within 30 days of such commencement
; and

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(l) existing shares held by a person on the
date of commencement of this Ordinance.

CHAPTER II. — DISCLOSURE
OF SHAREHOLDING IN A LISTED

COMPANY

4. Acquisition of more
than ten per cent voting shares of a company. —

(1)Any acquirer who acquires voting shares, which (taken
together with voting shares, if any, held by the acquirer) would entitle
the acquirer to more than ten per cent voting shares in a listed company,
shall disclose the aggregate of his shareholding in that company to
the said company and to the stock exchange on which the voting shares
of the said company are listed as provided in sub-section (2).

(2) The disclosure mentioned in sub-section (1), shall be made within
two working days of,—

(a) the receipt of intimation of allotment of voting shares; or

(b) the acquisition of voting shares, as the case may be.

Explanation. — For the purposes of this section expression “acquisition”
shall include purchases confirmed by the member of a stock exchange in
accordance with sub-rule (4) of rule 4 of the Securities and Exchange
Rules, 1971.

(3) Any acquirer may acquire additional voting shares in any period of
twelvemonths after acquisition of voting shares pursuant to sub-section
(1) without making disclosure as required by sub-section (1) in case the
total acquisition does not exceed an aggregate of twenty five per cent.

CHAPTER III. — SUBSTANTIAL
ACQUISITION OF VOTING SHARES

AND ACQUISITION OF CONTROL
OF A LISTED COMPANY

5. Additional acquisition
of voting shares. —

(1) No person shall, directly
or indirectly, acquire—

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a) voting shares, which (taken
together with voting shares, if any, held by such person) would entitle
such person to more than twenty five per cent voting shares in a listed
company; or

b) control of a listed company, unless such person makes a public
announcement of offer to acquire voting shares or control of such
company in accordance with this Ordinance.

(2) Before making announcement under sub-section (1), such person shall
make disclosure in the manner specified in section 4.

6. Consolidation of holdings.

(1) No acquirer, who has acquired
more than twenty-five per cent but less than fifty-one per cent of the
voting shares or control of a listed company, shall acquire additional
voting shares or control unless such acquirer makes a public announcement
of offer to acquire voting shares or control in accordance with this
Ordinance: Provided that such acquirer shall not be required to make
a fresh public announcement of offer within a period of twelve months
from the date of the previous announcement.

(2) No acquirer shall acquire voting shares in excess of the quantity
specified in the invitation of offer made by such acquirer and all additional
or incremental acquisition beyond the preceding offer shall be valid
only through further offer.

(3) Nothing in this section apply
to a person who has already acquired fifty-one percent or more of the
voting share or control in consequence of making a public announcement
of the offer.

7. Appointment of manager
to the offer. —

(1) Before making any public
announcement the acquirer shall appoint a bank, or financial institution,
or a member of a stock exchange who is not an associate, or group, of
the acquirer or the target company, as a manager to the offer.

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(2) The manager to the offer
shall be deemed to be the agent of the acquirer.

.8.
Timing of the public announcement. —

(1) Before acquisition of
votings hares beyond the threshold specified in section 5 or section
6, the acquirer shall, after giving notice to the Commission as required
by sub-section (3) of section 9, make a public announcement of such
an intention forthwith.

(2) In case of an acquirer acquiring Global Depository Receipts or American
Depository Receipts which, when taken together with the voting shares,
if any, already held by the acquirer, would entitle the acquirer to
voting shares, exceeding the percentage specified in section 5 or section
6, the public announcement referred to in sub-section (1) shall be made
not later than two working days before he acquires voting shares on
such securities upon conversion or exercise of option as the case may
be.

9. Public announcement.

(1) The public announcement
shall be published at least in one issue each of a daily newspaper in
English language and a daily newspaper in Urdu language having circulation
in the province or provinces in which the stock exchange, on which the
target company is listed, is situated.

(2) The public announcement shall contain such information as may be
prescribed.

(3) A copy of the public announcement shall be submitted to the Commission
through the manager to the offer at least two working days before its
issuance.

(4) Simultaneous with the submission of the public announcement to the
Commission, the public announcement shall also be sent to all the stock
exchanges on which the voting shares of the target company are listed
for being notified on the notice board and on the automated information
system thereof, and to the target company at its registered office for
being placed before the board of directors of such company.

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(5) A public offer under this
Ordinance shall be deemed to have been made on the date on which the
public announcement is made in any of the newspapers as required by
sub-section (1).

10. Contents of public
offer, mode of payment and minimum offer price. —

The contents of the public
offer, its submission to the Commission, the date to be specified for
the public announcement, mode of payment and minimum offer price, shall
be in such form and manner as may be prescribed.

11. Public announcement
and offer letter etc. not to contain misleading material.—

The public announcement, any other advertisement, circular,
brochure, publicity material or offer letter issued in respect of, or
in relation to, the acquisition of voting shares shall not contain any
misleading information.

12. Number of voting shares
to be acquired. —

(1) A public offer shall be
made by the acquirer for such percentage as the acquirer may decide.

(2) Where the number of voting shares offered for sale by the shareholders
are more than the voting shares offered to be acquired by the acquirer,
the acquirer shall, in consultation with the manager to the offer, accept
the public offer or offers received from the shareholders on a proportional
basis: Provided that acquisition of voting shares from a shareholder
shall not be less than the minimum marketable lot or the entire holding
if it is less than the marketable lot.

13. General obligations
of the acquirer. —

(1) Within two working days
of the public announcement, the acquirer shall send a copy of the proposed
offer letter to the target company at its registered office address
and all the stock exchanges, where the voting shares of the company
are listed, and the Commission.

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(2) The acquirer shall ensure
that the offer letter is sent to all the shareholders of the target
company whose names appear on the register of members of the company
as on the date specified in the public announcement: Provided that where
the public announcement is made pursuant to an agreement to acquire
voting shares or control of the target company, the offer letter shall
be sent to the shareholders other than the parties to the agreement.

(3) A copy of offer letter shall be sent to—

(a) the custodians of Global
Depository Receipts or American Depository Receipts to enable such
persons to participate in the open offer, if they are entitled to
do so; and

(b) the convertible security holders, where the period of conversion
falls within the offer period.

(4) The date of acceptance
of a public offer shall be not later than the sixtieth day from the
date of public announcement.

(5) In case the acquirer is a company, the public announcement, brochure,circular,
offer letter or any other advertisement or publicity material issued
toshareholders in connection with a public offer shall state that the
directors accept the responsibility for the information contained in
such documents:Provided that if any of the directors desires to exempt
himself from responsibility for the information in such documents, such
director shall issue astatement to that effect together with reasons
thereof.

(6) Where a public offer is made conditional upon minimum level of acceptance,
the acquirer may accept the acceptances even if such acceptances, put
together, do not reach the minimum level so offered:

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Provided that the acquirer
may reject all such acceptances if the same do not reach a level indicated
in the public offer.

(7) Persons, other than the acquirer, representing or having interest
in the target company or an insider or a beneficial owner of more than
ten per cent of the voting shares during the last twelve months, shall
stand excluded and shall not participate in any matters concerning or
relating to a public offer including any preparatory steps leading to
the offer.

(8) On or before the date of issue of public announcement, the acquirer
shall create a security as provided in this Ordinance.

(9) The acquirer shall ensure that firm financial arrangements for fulfilment
of the obligations under the public offer and suitable disclosures in
this regard have been made in the public announcement.

(10) The acquirer shall, within a period of thirty days from the date
of the closure of public offer, complete all procedures relating to
the public offer including payment of consideration to the shareholders
who have accepted the public offer and for the purpose open a special
account as provided in sub-section (1) of section 20:Provided that where
the acquirer is unable to make the payment to the shareholders who have
accepted the public offer before the said period of thirty days ue to
non-receipt of requisite statutory approvals, the Commission may, if
satisfied that non-receipt of requisite statutory approvals was not
due to any wilful default, neglect or failure of the acquirer to diligently
pursue the applications for such approvals, grant extension of time
for a period not exceeding thirty days in aggregate.

14. General Obligations
of the Board of Directors of the target company. —

(1) The board of directors
of the target company, during the offer period, shall not—

(a) sell, transfer, or otherwise
dispose of or enter into an agreement for sale, transfer, or for disposal
of the undertaking or a sizeable part thereof, not being sale or disposal
of assets in the ordinary course of business of the company or its
subsidiaries;

(b) encumber any asset of the company or its subsidiary;

(c) issue any right or bonus voting shares during the offer period;
or

(d) enter into any material contract.

(2) The target company shall furnish to the acquirer, within seven days
of the request of the acquirer or within seven days from the specified
date mentioned in the public announcement, whichever is later, a list
of convertible security holders as are eligible for participation under
clause (b) of sub-section (3) of section 13 containing name, address,
shareholding and folio number, and of those persons whose applications
for registration of transfer of the securities are pending with the
company.

(3) Once the public announcement has been made, the board of directors
of the target company shall not appoint an additional director or fill
in any casual

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on the board of directors, by any person representing or having interest
in the acquirer till the date of certification by the manager to the
offer as provided under sub-section (6).

(4) The board of directors of the target company may, if it so desires,
send its unbiased comments and recommendations on the public offer to
the shareholders: Provided that for any misstatement, or for concealment
of material information, the directors shall be liable to penalty as
provided in this Ordinance.

(5) The board of directors of the target company shall facilitate the
acquirer in verification of securities tendered for acceptance.

(6) Upon fulfilment of all obligations by the acquirer under this Ordinance
as certified by the manager to the offer, the board of directors of
the target company shall transfer the securities acquired by the acquirer,
whether under an agreement or from open market purchases, in the name
of the acquirer.

(7) The target company shall allow such changes in the board of directors
as would give the acquirer proportionate representation on the board
or control of the company notwithstanding anything contained in the
Companies Ordinance, 1984 (XLVII of 1984).

(8) Where an acquirer, in compliance with the provisions of this Ordinance
, has acquired at least thirty per cent of the voting shares of the
target company, he shall be entitled to a proportionate representation
on the board of directors of the target company as hereinafter provided.

(9) The acquirer shall serve a notice on the target company together
with evidence of his voting power so acquired and a copy of such notice
shall also be submitted to the Commission.

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(10) On receipt of notice
as specified in sub-section (9), the board of directors of the target
company shall cause a meeting of the board to be held within ten days
from the receipt of the notice under sub-section (9).

(11) The board of directors of the target company may fill any casual
vacancy so created by the resignation of one or more directors with
mutual consent to accommodate the acquirer on the board in accordance
with his entitlement.

(12) In case the acquirer does not get a proportionate representation
on the board of directors of the target company or the number of casual
vacancies so created to complete the board on the basis of proportional
representation are not sufficient, the acquirer may serve a notice on
the target company for holding of fresh elections and shall submit a
copy of such notice to the Commission forthwith.

(13) The board of directors of the target company shall cause the election
of directors to be held within thirty days from the receipt of the notice
under sub-section(12).

(14) The election of directors of the target company shall be held in
accordance with the provisions of sub-sections (2) to (5) of section
178 of the Companies Ordinance, 1984 (XLVII of 1984).

(15) The board of directors  so elected shall hold office during
the remainder of the term of the outgoing directors of the target company.

(16) Any irregularity in the election of directors so held may be brought
to the notice of the Commission either by the management of the target
company or by the acquirer within seven days of the date of such election.

(17) The Commission may declare the election, so held, null and void
if it is satisfied that certain irregularities did exist in the holding
of the election and may order the holding of fresh election under the
supervision of an independent person to be appointed by the Commission
for such purpose.

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(18) In case fresh elections
are held as specified in sub-section (17), the Commission may impose
such penalty on the outgoing directors in their individual capacity
as it may deem fit and such penalty shall in no case be debited to the

company’s account.

15. General obligations
of the manager to the offer. —

(1) Before the public announcement
is made, the manager to the offer shall—

(a) ensure that the acquirer
is able to implement the public offer;

(b) ensure that the provision relating to security referred to in
section 19 has been made;

(c) ensure that firm arrangements for funds and money for payment
through verifiable means to fulfil the obligations

under the public offer have been made;

(d) ensure that the public announcement is made in accordance with
section 9;

(e) furnish to the Commission a due diligence certificate which shall
accompany a copy of the proposed offer letter;

(f) ensure that the proposed public announcement and offer letter
are filed with the Commission, target company and also sent to the
stock exchange on which the voting shares of the target company are
listed in accordance with this Ordinance;

(g) ensure that the contents of the public announcement and offer
letter are true, fair and adequate and based on reliable sources,
quoting the source wherever necessary;

(h) ensure compliance of the provisions of the Ordinance and any other
laws or rules as may be applicable in this regard;

(i) upon fulfilment of the necessary obligations by the acquirer under
this Ordinance, cause the bank with whom the security has been deposited
to release the balance amount to the acquirer; and

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(j) send a report to the
Commission within forty-five days from the date of closure of public
offer or earlier withdrawal

thereof.

16. Procedure for making
competitive bid. —

(1) Any person, other than
the acquirer who has made the first public announcement, who is desirous
of making a competitive bid, shall, within twenty-one days of the public
announcement of the first offer, make a public announcement of his offer
for acquisition of the same voting shares of the target company.

(2) No public announcement of a competitive bid shall be made after
twenty-one days from the date of public announcement of the first offer.

Explanation. – For the purpose of this section a bid shall be deemed
as
competitive only if it offers a
higher purchase price.

(3) A competitive bid shall
not be for less than the number of voting shares for which the earlier
public offer has been made.

(4) Upon the public announcement of a competitive bid the acquirer,
who has made a public announcement of the earlier offer, shall have
the option to make another announcement—

(a) revising the public offer; or

(b) withdrawing the public offer with the prior approval of the Commission:
Provided that if no such announcement is made within ten days of the
public announcement of the competitive bid, the earlier offer on the
original terms shall continue to be valid and binding on the acquirer
who has made the earlier public offer, except that the date of closing
of suc h public offer shall stand extended to the date of closure
of public offer under the last subsisting competitive

bid.

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(5) The provisions of this
Ordinance shall, mutatis-mutandis, apply to the competitive bid made
under sub-section (1).

(6) An acquirer who has made a public announcement, and has not withdrawn
his public offer in terms of subsection (4), shall have the option to
make an upward revision of his offer in respect of the price and the
number of voting shares to be acquired at any time within seven working
days prior to the date of closure of the last subsisting public offer
without changing any other terms and conditions of the said public offer.

(7) Any upward revision made in terms of sub-section (6), shall be made
only on the following conditions, namely: —

(a) the making of a public announcement in respect of such changes
or amendments in all the newspapers in which the earlier public announcement
was made;

(b) the informing of the Commission, the stock exchange on which the
voting shares of the target company are listed, and the target company
at its registered office, simultaneous with the issue of public announcement
referred in clause (a); and

(c) the increase in the value of the security as provided under sub-section
(3) of section 19.

(8) Where there is a competitive bid, the date of closure of the earlier
bid, as also the date of closure of all the subsequent competitive
bids, shall be the date of closure of public offer under the last
subsisting competitive bid and the public offers under all the subsisting
competitive bids shall close on the same date.

17. Upward revision of Offer.
Irrespective of whether or
not there is a competitive bid the acquirer, who has made the public announcement,
may make upward revision in his offer in respect to the price and the
number of voting shares to
Page
18 of 24
be acquired, at any
time up to seven working days prior to the date of the closure of public
offer: Provided that any such upward revision of the public offer shall
be made only on the following conditions, namely: —

(a) the making of a public announcement in respect of such changes
or amendments in all the newspapers in which the earlier public announcement
was made;

(b) the informing of the Commission, the stock exchange on which the
voting shares of the target company are listed, and the target company
at its registered office, simultaneous with the issue of public announcement
referred in clause (a); and

(c) the increase in the value of the security as provided under sub-section
(3) of section 19.

18. Withdrawal of public
offer. —

(1) A public offer, once made,
may be withdrawn

(a) if the withdrawal is consequent
upon any competitive bid;

(b) if the sole acquirer, being a natural person, has died; or

(c) in such circumstances as may be prescribed.

(2) In the event of withdrawal
of the public offer under any of the circumstances specified under sub-section
(1), the acquirer, or the manager to the offer, shall—

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(a) make a public announcement
in all the newspapers in which the public announcement was made indicating
reasons for withdrawal of the public offer; and

(b) inform the Commission, the stock exchange on which the voting
shares of the target company are listed, and the target company at
its registered office, simultaneous with the issue of such public
announcement.

19. Security to be furnished
by the acquirer. —

(1) The acquirer shall furnish
a security for performance of his obligations on such terms and conditions
as may be prescribed.

(2) The total consideration payable under the public offer shall be
calculated assuming full acceptances irrespective of whether the consideration
for the public offer is payable in cash or otherwise.

(3) In case there is any upward revision of offer, consequent upon a
competitive bid or otherwise, the value of the security shall be increased
as may be prescribed under subsection (1).

(4) The security furnished shall be released in such manner as may be
prescribed.

20. Procedure for payment
and delivery of voting shares. —

(1) For the amount of consideration
payable in cash, the acquirer shall, within a period of twenty-one days
from the date of closure of the public offer, open a special account
with a scheduled bank and deposit therein such sum as would, together
with ninety per cent of the security furnished under section 19, make
up the entire sum due and payable to the shareholders as consideration
for acceptances received and accepted in terms of the public offer.

(2) The unclaimed balance in the account referred to in sub-section
(1) shall, at the end of six months from the date of deposit thereof,
be refunded to the acquirer in such manner as may be prescribed.

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(3) In respect of consideration
payable by way of exchange of securities, the acquirer shall ensure
that the securities are actually issued and dispatched to the shareholders.

CHAPTER IV. — ENQUIRY
AND RELATED MATTERS

21. Enquiry. — The Commission may appoint one or more persons as enquiry
officer or officers to undertake an enquiry for any of the following purposes,
namely: —

(a) to enquire into the complaints
received from the investors holding not less than one-tenth of the
total voting powers in a target company, on any matter having a bearing
on the allegations of substantial acquisition of voting shares and
takeovers;

(b) to enquire suo motu upon its own knowledge or information,
in the interest of securities market or the investors, for any breach
of the provisions of this Ordinance;

(c) to ascertain whether the provisions of this Ordinance are being
complied with:

22. Notice before enquiry.

(1) Before ordering an enquiry
under section 21, the Commission shall give not less than seven days’
notice to the acquirer, the seller, the target company, the manager
to the offer as the case may be.

(2) During the course of an investigation, the acquirer, the seller,
the target company, the manager to the offer, against whom the investigation
is being carried out shall be bound to discharge his obligation as provided
in this Ordinance and the rules made there under.

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23. Obligations on enquiry
by the Commission. —

(1) It shall be the duty of
the acquirer, the seller, the target company or the manager to the offer,
whose affairs are being enquired into and of every director, officer
and employee thereof, to produce to the enquiry office r such books,
accounts, securities records and other documents in its custody or control
and furnish to the enquiry officer such statements and information as
he may, within such reasonable period as he may specify, require.

(2) The acquirer, the seller, the target company, the manager to the
offer and the persons being enquired into shall allow the enquiry officer
to have reasonable access to the premises occupied by such a person
or by any other person on behalf of such a person and also extend reasonable
facility for examining any books, records, documents and computer data
in the possession of such a person and also provide copies of documents
or other materials which, in the opinion of the enquiry officer, re
relevant for the purposes of the enquiry.

(3) The enquiry officer, in the course of enquiry, may examine or record
the statements of any director, officer or employee of the acquirer,
the seller, the target company and the manager to the offer.

(4) It shall be the duty of every director, officer or employee of the
acquirer, the seller, the target company and the manager to the offer
to give to the enquiry officer all assistance in connection with the
enquiry which he may require.

24. Submission of report
and communication of findings. —

(1) The enquiry officer shall,
as soon as possible, on completion of the enquiry, submit report to
the

Commission.

(2) The Commission shall, after consideration of the enquiry report,
communicate the findings of the enquiry officer to the acquirer, the
seller, the target company, the manager to the offer as the case may
be.

(3) On receipt of the reply from the acquirer, the seller, the target
company or, as the case may be, the manager to the offer, the Commission
may direct them to Page 22 of
24
take such measures as it
may deem fit in the interest of the securities market and for due compliance
with the provisions of this Ordinance and rules made there under.

25. Directions by the Commission.
The Commission may, in the
interests of the securities market, give such directions as it deems fit
including—

(a) directing the person concerned not to further deal in securities;

(b) prohibiting the person concerned from disposing of any of the
securities acquired in violation of provisions of this Ordinance;

(c) directing the person concerned to sell the voting shares acquired
in violation of the provisions of this Ordinance; and

(d) taking such action against the person concerned as may be necessary.

26. Penalties for non-compliance.

(1) In the event of withdrawal
of public offer, except as provided in section 18, or contravention
of any provision of this Ordinance, the acquirer and any person acting
in concert shall stand debarred as acquirers for the next three years.

(2) In case the board of directors or management of the tar get company
contravenes any provision of this Ordinance, the directors, the chief
executive and the company and secretary, on a finding by the Commission,
shall stand disqualified to hold any such office in a listed company
for the next two years.

(3) If any person—

(a) refuses or fails to furnish
any document, paper or information which he is required to furnish
by, or under, this Ordinance;

(b) refuses or fails to comply with any order or direction of the
Commission made or issued under this Ordinance; or Page
23 of 24

(c) contravenes or otherwise
fails to comply with the provisions of this Ordinance, the Commission
may, if satisfied, after giving the person an opportunity of being
heard, that the refusal, failure or contravention was wilful, impose
penalty which may extend to one million rupees as may be specified
in the order and, in the case of a continuing default, a further sum
calculated at the rate of ten thousand rupees for every day after
the issue of such order during which the refusal, failure or contravention
continues.

(4) Any sum directed to be paid under sub-section (3) shall be recoverable
as an arrear of land revenue.

27. Delegation of powers.
The Commission may, subject
to such conditions and limitations, as it may deems fit to impose, delegate
all or any of its powers and functions under this Ordinance to a Commissioner
appointed under section 5 of the Securities and Exchange Commission of
Pakistan Act, 1997 (XLII of 1997).

28. Relaxation of provisions
of the rules. —
Where the Commission
is satisfied that it is not practicable or expedient to comply with any
requirement of the rules made hereunder in a particular case, the Commission
may, in consultation with the Federal Government and for reasons to be
recorded, relax such requirement subjectto such conditions as it may deem
fit.

29. Power of the Commission
to make rules.—
The Commission
may, in consultation with the Federal Government and by notification in
the official Gazette, make rules for carrying out the purposes of this
Ordinance.

30. Ordinance to override
other laws etc.—
The provisions
of this Ordinance shall have effect notwithstanding anything contained
in the Companies Ordinance, 1984 (XLVII of 1984), or any other law for
the time being in force or in any charter, statute or memorandum or articles
of association or in any applicable document or resolution.

Page 24 of 24

31. Removal of difficulties.
If any difficulty arises in
giving effect to any provision of the Ordinance, the Federal Government
may make such order, not inconsistent with the provisions of this Ordinance,
as may appear to it to be necessary for the purpose of removing the difficulty.

GENERAL

PERVEZ MUSHARRAF,

PRESIDENT.

———

MR JUSTICE

MANSOOR AHMED,

Secretary.