ECONOMIC REFORMS (ACQUISITION AND COMPENSATION)
Gazette of Pakistan, Extraordinary, Part II, 24th October, 1973
In exercise of the powers conferred by Article 12 of the Economic Reforms Orders, 1972 (P.O. No. 1 of 1972), the Federal Government is pleased to make the following rules, namely :–
1. Short title and commencement. -(1) These rules may be called the Economic Reforms (Acquisition and Compensation) Rules, 1973.
(2) They shall come into force at once.
2. Definitions.-In these rules, unless there is anything repugnant in the subject or context,–
(a) ‘Article’ means the Article of the Order ;
(b) ‘Board’ means the Board of Industrial Management established under the Development of Industries (Federal Control) Act, 1972 (XVI of 1972) ; and
(c) ‘Order’ means the Economic Reforms Order, 1972 (P.O. No. 1 of 1972).
3. Preparation of list of shareholders.- (1) The Managing Director of an establishment shall, after giving effect to changes, if any, permitted in pursuance of a notification under Article 7-A prepare and submit Federal Government a list of shareholders indicating the shares held by such shareholders and such list shall form the basis for determining the extent of acquisition of shares.
(2) Where shares held by a shareholder are registered under more than one folio in the registers of a company, all such shares will be consolidated to determine holdings of a shareholder.
4. Order of acquisition.-The order of acquisition of shares of an establishment passed by the Federal Government shall be communicated to the Managing Director who shall inform the shareholders, whose shares stand acquired, either partly or wholly, by registered post acknowledgement due at the address given in the share register and he shall also furnish a copy of such order, if the shares of such establishment are quoted on a stock exchange, to the recognised stock exchanges.
5. Procedure on acquisition.- (1) Where orders for acquisition of shares of an establishment are passed by the Federal Government, the Managing Director shall make arrangements to issue new share certificates which will be different in design and distinguishable from the existing share certificates of the establishment, and to exchange the existing certificates with the new ones or with the certificates of entitlement for compensation for acquired shares, as the case may be.
(2) For the purpose of issuing new share certificates and certificates of entitlement for compensation, the Managing Director shall issue a public notice giving a date, which shall not be less than ten days from the date of publication of such notice, by which date the shares should be lodged with the establishment.
(3) Where only a portion of shares of a shareholder whose shares have been acquired has been lodged with the company under sub-rule (2), the shares shall stand acquired in the order in which they were lodged with the company till the number of shares ordered to be acquired have been so acquired.
(4) Where the shares to be acquired are not lodged with the company, or where the number of shares lodged is less than the number to be acquired, the Managing Director shall, subject to such directions as the Federal Government may given, determine as to which of the shares should be acquired.
(5) A list of the shares acquired shall be furnished by the Managing Director to the recognised stock exchanges.
(6) Where a share, is liable to acquisition, no exemption from such acquisition may be claimed on the ground that it is held or owned by another person :
Provided that where a share is lodged with the company before the date fixed under sub-rule (2) accompanied by a valid transfer deed, the Managing Director shall endorse the certificate of entitlement for compensation in the name of transferee and the compensation shall in such case be payable to such transferee.
(7) The certificates of entitlement for compensation and the new share certificates shall be issued only in exchange for the existing share certificates, and where such share certificates are reported to have been lost or destroyed, the new certificates will be issued after fulfilling the same formalities as are required in the case of issue of duplicate share certificate.
(8) The shares acquired under the Order shall be registered in the name of the Federal Government and the Managing Director shall prepare share certificates in respect of such shares and deliver them to such agency as the Federal Government may direct.
(9) All share certificates issued before acquisition in respect of the acquired shares shall cease to be valid deeds of ownership of shares and, except for exchange for certificates of entitlement for compensation, shall not be traded or hypothecated.
6. Register of acquired shares.-The Managing Director shall maintain a separate register of acquired shares and of the certificates of entitlement for compensation, and shall furnish lists thereof to the Federal Government.
7. Payment of compensation.-On presentation of the certificate of entitlement for compensation through a recognised bank, the Federal Government shall cause payment of compensation to be made either in cash or in the form of bonds or partly in the form of bonds, as it may decide.
8. Transferability and eligibility of bonds for hypothecation.-The bonds issued on acquisition of shares shall be transferable and eligible for hypothecation.
9. Offences and penalties. -Whoever in pursuance of the Order or any rule or notification made or issued thereunder, makes a declaration or furnishes information which he knows or has reason to believe to be false or gives a false certificate or fabricates documents or books of accounts to fraudulently get shares transferred shall be punishable with imprisonment which may extend to two years, or with fine which may extend to one lac rupees, or with both.