This document outlines corporate law provisions regarding the appointment of inspectors to investigate the affairs of a company. Key points include: - The corporate regulator (commission) can appoint inspectors under various circumstances, such as upon application from shareholders, a court order, or if the commission believes investigation is needed. - Inspectors have broad powers to examine documents, summon witnesses, and investigate associated companies. Companies must assist inspectors. - Inspectors report their findings, and the commission can then take actions like prosecuting individuals, removing directors, canceling contracts, or applying to wind up the company. Restrictions may also be placed on share transfers.

2. Corporate law

3. Appointment of inspector
Where the commission is of the opinion that it
is necessary to investigate the affairs of the any
company.it may appoint inspector.
1. Investigation on application
The commission may appoint one or more
inspector to investigate the affairs of the
company.

4. Conti…
a. On the application from members holding not less than 1-
10 of total voting powers having share capital
b. Application from total memebers holding not less than 1-
10 shares 0f the company not having a share capital
c. On reciept of report made after inspection of the
company books of account by an officer authorised by
commission
d. On report the registrar that information or records not
provided or not correct or not disclose full information or
facts.
e. Application by members with full support of evidence to
comission.

5. 2. Investigation on demand
The commission may appoint one or more
inspector to investigate the affairs of the
company.
a. A special resolution passed by company
demanding investigation of the affairs
b. Or by the order of the court

6. 3. Investigation by commission
The commission may appoint inspectors to
investigate the affairs of the company.
a. Business conducted to defraud its
creditors,fraudelent or unlawful purpose
b. Person in formation or management have
been guilty of fraud.or other misconduct.
c. Secret benefit derived by management
d. Members are not provided all information
about the affairs of the company

7. Judicial proceeding
e. Shares alloted inadequate considration
f. Affairs are not managed according to the
principles or law
g. Financial position is endanger its to
insolvancy

8. Powers of inspectors
1. Inspector to be a court
Inspector has the powers of court under the code
of civil procedure,1908 in following matters
Attendence of persons and examining them on
oath
Discovery and production of books and papers
and any material objects
Issuaing commissions for th examination of
witnesses

9. 2. Judicial proceedings
Every proceding before investigator is deemed
as judicial proceedings

10. 3. Investigation of associated
companies
An inspector may investigate and report on the
affairs of any other associated company which is
or has been associated and from the ceo of that
company

11. 4. Duty to assist
Officers ,employyes and agents off the company
and all person who have dealing to give all
assistance to the investigator
Any one who refuses can result in penalty of fine
up to 1 million and imprisonment of upto 2
years

12. Inspector report
Inspector if directed by commission shall make
interim reports
At the end of investigation ,inspector will make
final report to the comission and commission
send final report to following
1. The company with such direction the
commission thinks fit
2. The applicants for the investigation

13. Conti ..
3. Any member, other body corporate or person
who is interested in the affairs of the
company on payment of the prescribed fee
4. Any creditor or body corporate whos
interests are effected
5. The court by whos order the investigator is
appointed
6. Registrar
7. The company to post on its website

14. Action against company
1. Prosecution
Prosecute person found guilty
2. Action against management
The commission ma apply to court to the court
to take action aganst the management of the
company
a. Remove any director,ceo or other officer of
the company

15. Conti ..
b. Diret directors to carry out changes in
management or accounting policies as may
be specified in order
c. Direct the company to call meeting to take
remedial action on matter specified by order
d. Directs that the contract which is against the
interest of members or benefit to specific
class cancelld or modified

16. 3. Effect of the court order
Incase of removal as a result of court order
following is the result
a. If directors removed,vacancy shall be filled in
accordance with act
b. If ceo is removed,board shall appoint new
ceo
c. Iff all directors incl ceo removed,general
meeting called to elect new directors

17. 4. Cancellation of contract
no director ,ceo,managing agent or other officer
of the company shall be paid any compansation
for cancellation or modification of a contract

18. 5. Loss of office
No person shall be paid any compansation or
damages for the lose of office by reason of an
order by the court

19. 6. Application for winding up
If report shows to commission that company
should be wound up the commission may
present to court unless the company already
wound up by court
• A petition for wound up on grounds
• An application of wound up on following
grounds
I. Unlawfull or fraudulent manner
II. Not provided its MOA

20. Conti ..
III. Against the public interest
• Both petition and applicaion as aforesaid

21. 7. Proceedings for recovery
If report shows to the commission that proceeding
in public interest should be brought by company or
body corporate whose affairs have been
investigated ,commission may initiate the
proceeding itself.
a. Any recovery in case of
fraud,misfeasance,breach of trust,or miscondct
in formation or mangmnt of the company
b. Recovery of any property of the company which
have misaplied or wrongfuly retained

22. Expenses of investigation
Expenses initially paid by commssion.
Following person are liable for reimbursement
1. Any person who is orderd to pay damages or
restore property as result of court order
2. Any company or body corporate whos name in
proceedings are brought shall be liable to extent
of the amount or property recoverd
3. When the investigation is orderd by
commission,the company or body corporate
who is being investigated is liable to pay

23. Conti …
4. Where the investigation is requested by
members of the co, the company or body
corporate and members is liable to pay
5. When the expenses paid by commission not
reimbursed,thay may shall be borne by fedral
govt

24. Restrictions on shares or debentures
1. The commission may impose following restrictions for 1
year for resons
a. Transfer of shares declared void
b. Where those shares are to be issuad,they shall not be
issued,transfer shall be void
c. No voting rights exercised for those shares
d. No right shares shall be issued in respect of those
shares,any issue or transfer shall be void
e. No dividend shall be paid on those shares except
liquidation
f. No change shall be made on ceo or director except change
by law

25. Conti ..
If transfer of shares results in change in directors
and the commission is of the opinion that such
change is against the public interest.it may
direcct
a. Voting rights for those shares not excercised
for period not exceeding one year
b. No resolution passed or action taken to
change directors unless confirmed by the
commission

26. Penalty
Imprisonment upto one year or fin upto 1 million or both.
1. Any one who exercises to dispose of such share or
right to be issuad such share knowing that he is not
entitled to do so.
2. Anyone who transfer such share in contavention of
any order made
3. Any one who votes with such share or proxy of such
share knowingly
4. Any one holding share fails to give notice of
restriction to any person entitled to vote as holder or
proxy

27. Investigation during winding up
An inspection or inquiry may be started if
a. Company passed resolution for windup
b. A petition has been submitted to court for
windup
c. Any civil or criminal proceding aganst the
company or its officers under any provision
of act

28. Serious fraud investigation
Rules as follows
1. Commission may apoint an investigator to investoigate such
serious offences,false statement,falsification,forgery, fruad or
deception.
2. Invsetigator must be professional having experience in the field of
corporate affaies,accountancy,taxation,forensic audit,capital
market,banking,IT.
3. Shall have powers under this act.the SECP act 1997 and code of
criminal procedure.
4. The commission may asl fedral govt to form joint invsetigation
team
5. JIT should be headed by senior level officer of
commission,including officer from fedral law enforcement agency
or authority

29. Conti ..
6. Any person fails to comply with intruction of
fedral govt punishable with imprisonment of
30 days or fine 1 lakh
7. JIT submit report to court through special
prosecuter with evidence