PSMA office-bearers holding offices illegally

LAHORE: The Pakistan Sugar Mills Association (PSMA) office-bearers are holding the association offices illegally as the body did not hold the annual general body meeting in the stipulated time period, given in the Trade Act 2013, which is an Act to provide for registration and regulation of trade organisations in Pakistan.

According to the Act, every registered trade organisation (associations and chambers) expect the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) is bound to hold their Annual General Meeting by Sept 30 and announce the election results and submit it to the Directorate General Trade Organisation (DGTO). However, the PSMA did not submit their election results in Sept 2019 as it was failed to hold the AGM on the stipulated date i.e. September 30 under the Act.

The Section 11 of the Act deals with the organisation and tenure of office-bearers and executive committee of trade organisations stated that “(1) Notwithstanding anything in any other law for the time being in force and memorandum and articles of association of any existing trade organisation the tenure of office-bearers of all trade organisations shall be one year, — (a) in the case of the Federation of Pakistan Chambers of Commerce and Industry from the 1st day of January to the 31st day of December; (b) in the case of all other trade organisations, from the 1st day of October to the 30th day of September. (2) The organisational structure of trade organisations including composition and tenure of executive committees and the manner of their elections shall be such as prescribed.”

Further, the Trade Organisations Rules 2013 Section 19 explains the Section 11 of the Act. The Section 19 of the Trade Organisations Rules 2013 stated that “The final result of the election of members of executive committee and office-bearers shall be officially announced at annual general meeting of the trade organisation called for the purpose within fifteen days of the date of polling under sub-rule (18) but not later than- (a) in case of the Federation, the 31st day of December of the year; and (b) in case of all other trade organisations, the 30th day of September of the year.”

Contrary to the Act and trade organisations rules, the PSMA did not hold the AGM on the given date. Further, the PSMA also not responded to the letter written by the DGTO to the Association for not submitting the election results to the regulatory body. DGTO Shahzia Ikram, talking to The News, confirmed that the PSMA did not submit the election results in the given timeframe so that the coadunation was not issued to it. Further PSMA was also barred from voting in Federation of Pakistan Chamber of Commerce and Industry (FPCCI) elections held last year, she added.

To a question about the legal status of the PSMA after not submitting the election results in the stipulated timeframe, she said that legally the PSMA registration exists with the DGTO till 2021 and it did not affects the existence of the Association. She further assigned deputy director Moin to explain the case to this correspondent.

Moin told The News that the letter was written to the PSMA on non-submitting the AGM and election results to the DGTO. However, he said that PSMA did not respond to the letter. Further, the PSMA submitted the election schedule and completed the process of holding the election in the given timeframe of the Act, but did not submit the AGM and election results to the DGTO.

On the other hand, PSMA Secretary General Inyatullah Khan claimed that the Association responded to the letter of the DGTO on non-submission of the election results and AGM holding by September 30 as described in the Act. However, he did not tell when the reply was submitted to the DGTO as the DGTO office said that no reply was given to the Association. “Currently, I did not remember when reply was given to the DGTO but we have replied to all letters of the DGTO,” he claimed.

To a question as to why the DGTO did not issue coadunation to the PSMA if it had reported to the AGM and election results, Inyatullah admitted that the DGTO did not issue coadunation to the PSMA and was barred from voting in the FPCCI election too as the Association was failed to hold AGM by September 30. However, he said that the PSMA got the coadunation from the Security and Exchange Commission of Pakistan (SECP) and got the relaxation of three months by December 2019 to hold the AGM and approved the election results. He said that the AGM was delayed as due delay in audit of the association’s accounts. “The AGM also approves the audited accounts of the Association as without the process, it could not hold AGM,” Inyatulah said.

To a question that the DGTO regulates the trade bodies and the platform concern to get coadunation, then how the PSMA can get it from the SECP,” he said the question should be asked from the SECP.

A spokesperson for the SECP said that it could not issue a coadunation to any trade body as it was not purview of it rather the DGTO. “Sometime other regulators referred to get verification of some matters and related documents from the SECP but this doesn’t mean that the SECP issued a coadunation and performed the act of another regulator,” he added. He said that the SECP did not issue coadunation to the PSMA.

It is important to mention here that the DGTO can appoint a regulator on a trade body if someone approaches it over violation of the Act on not holding election in the given timeframe of the Act. Section 14 deals with the powers and functions of the Regulator. The sub section (f) stated that “annul results of any election held by any trade organisation, if he is satisfied - and further sub-section stated (iii) upon a complaint filed by an aggrieved person in this regard within thirty days of the announcement of the results of such election, that the irregularities in the conduct of such election justify such annulment and, by order in writing, order for fresh election to be held within such period as may be specified in the order.”