‘Accounts receivable’ declared asset in proposed new law

ISLAMABAD: The government has included in a proposed law tabled in the National Assembly ‘accounts receivable’ as an asset of a sitting lawmaker or a contesting candidate. The non-declaration of such an ‘account receivable’ had led to the Supreme Court disqualifying Nawaz Sharif for life, barring him from standing for any elected office and ousting him as prime minister in July 2017.

A package of amendments moved in the Elections Act, 2017, makes one addition, “including accounts receivable”, to the definition of asset contained in Section 2.

According to the existing definition, an asset means any property owned or held by a candidate or a legislator.

The apex court had held that the question emerging for its consideration is whether Nawaz Sharif as a Chairman of the Board of Capital FZE was entitled to salaries and whether the salaries if not withdrawn being receivable as such constitute assets which require disclosure in terms of Section 12(2) of the Representation of the People Act (ROPA), 1976 and whether his failure to disclose them would entail his disqualification.

Since the word 'asset' was not defined in the ROPA, the court relied on Black’s Law Dictionary to ascertain its meaning, finding that it includes: “something physical, such as cash, machinery, inventory, land and building; an enforceable claim against others such as accounts receivable; rights, such as copyright, patents, trademark etc.; and an assumption, such as goodwill”.

The court noted that such a definition of ‘receivables’ is also relevant, which means any collectible whether or not it is currently due. It also looked up the word ‘receivable’ in the Business Dictionary, finding that it is an “accounting term for amount due from a customer, employee, supplier (as a rebate or refund) or any other party."

The Supreme Court further held that the reproduced definitions leave no doubt that a salary not withdrawn would nevertheless be receivable and as such would constitute an asset for all legal and practical purposes. When it is an asset for all legal and practical purposes, it was required to be disclosed by Nawaz Sharif in his nomination papers in terms of Section 12(2) of the ROPA .

It recalled that Nawaz Sharif’s lawyer himself affirmed that his client indeed was a chairman of the board of Capital FZE and that he was entitled to a salary — even if he never withdrew it. It has not been denied that Nawaz Sharif being Chairman of the Board of Capital FZE was entitled to a salary, therefore, the statement that he did not withdraw the salary would not prevent the un-withdrawn salary from being receivable, hence [making it] an asset.

In its report, the famous Panama Joint Investigation Team (JIT) had said it had secured evidence directly from the UAE's Jebel Ali Free Zone Authority (Jafza), a regulatory body, confirming that Nawaz Sharif not only served as chairman of the board of a Dubai-based company, owned by his son, but he also drew a salary of 10,000 dirhams between Aug 7, 2006 and April 20, 2014 — till nearly a year after assuming the office of prime minister. The sticking point was that Nawaz Sharif did not declare this income in his nomination papers.

It was not the litany of allegations raised in the ten volumes of the JIT report that prompted a lifelong disqualification of the sitting prime minister. All the questions raised in the JIT findings were dispatched to the accountability courts for adjudication.