The Law Mag

Merger and De-merger (intervention and regulation of competition commission of Pakistan)

2016-10-24T10:19:00.002+05:00

Mergers and acquisitions in Pakistan are intervened by Competition Commission of Pakistan to check that whether the merger, demerger or acquisition is going to create negative competition or not. Complete and detailed procedural formalities and law can be found under Merger Regulations along with guideline pertaining to it. Exclusive department named as ’Merger and Acquisitions Department’ regulates merger of shares or assets, including joint ventures and plays advisory roles to the guidelines governing merger and acquisition activities.

Further going into detailed, let us develop understanding of terms Merger and acquisition according to this Act. It is defined as ‘the merger, acquisition and amalgamation, combination or joining of tw

o or more undertakings or to form a new undertaking; and expression ‘merge’ means to merge, acquire, amalgamate ,combine or join, as the context may require. Whereas acquisition can be meant as ‘change of control of any undertaking by way of acquisition of Shares, assets or any other mean.

Procedure:

Section 11 of Competition Commission Act provides that where an undertaking, intends to acquire the share or assets of another undertaking, or two or more undertakings intend to merge the whole or part of their businesses, and meet the pre-merger notification thresholds stipulated in regulations prescribed by commission, such undertaking or undertakings shall apply for clearance from commission of the intended merger. Competition (Merger Control) Regulations, 2007 provides comprehensive detail on the outlines and procedures to be followed while observing the process of merger.

Merger procedure can be divided into two phase.

During first phase, according, to the sec 11 sub-section 4 a pre-merger application is filed to the commission with undertaking or undertakings along with copy of bank fees, an application will be in the form as prescribed by the commission and will be treated as advance copy or advance intimation. The commission would start preliminary examination of the application on receiving the receipt and will issue a non objection certificate if it is satisfied, as an order. The commission shall by way of an order referred in section 31, decide on whether the intended merger meets the thresholds and the presumption of dominance as determined. This process is to be completed by the commission within thirty days of receipt of the application. Where commission fails to determine within prescribed period of thirty days for the first phase review shall means that the commission has no objection to intended merger.

If the commission fails to review on the basis of all information provided or is unable to conclude that merger situation does not raise competition concerns, the commission shall proceed to carry out a more detailed assessment as a phase 2 review.

For the purpose of Second phase, the commission will notify the parties to the merger and may require the concerned undertakings to provide such information as it considers necessary to enable the Commission to make the necessary determination. Second phase review decision will be given within 90 working days and where Commission fails to render decision within 90 days, it is understood that Commission has no objection. Commission will review the merger assess whether it substantially lessens competition creating or strengthening a dominant position in the relevant market, and shall give its decision on the proposed transaction, it may give clearance and authorize the intended merger without conditions .The commission may reject the application if its fail to provide the information required.

Discretion of commission:

Where commission finds that merger is being accomplished without complying with the provisions of sub-section (1) to sub-section (4), the Commission shall make an order under section 31 after being heard.

The commission may within one year, review the order of approval of merger on its own or on the application of the undertakings concerned on the grounds that it is satisfied with the circumstances of the relevant market or the undertaking has so changed as to warrant review of the condition imposed.

Where commission founds that merger was obtained on submitting false or misleading information by the undertaking or the conditions prescribed in relevant order of the commission have not been fully complied with, the commission may after hearing undo such merger or acquisition or prescribe modifications or additions in the original order.

The Right to Privacy Still at Stake

2016-10-24T10:05:00.000+05:00

The recent and controversial Prevention of Electronic Crime Bill of 2015 is on its way for assent of President. The hopes of citizens for protection of their privacy are once again undermined as the principles for surveillanceain precedence over the Fair Trial Act of 2013 allowing the State to access citizen’s personal data. In this context none of our data is secure on our laptops, mobile phones and computers; any authorised officer if satisfied is empowered to access the data on any information system. Moreover, our personal data can be accessed by any foreign or international agency if our government deems fit that the data might assist that particular agency. The relevant provision also provides that the access to data may be refused that if public interest is involved, or the request made is targeted to a specific person.

Balancing the right of privacy with the national security interests has turned into a complex subject now days; any police check post can check your car and is authorised to ask about your activities at random. They can ask questions about the other passengers in your car and what kind of relationship you have with them. In this grand tradition of continuing to delegate powers to officers there is little surprise that the subsequent misuse of those powers is a very common predicament in our State. Previously, the Telecom Act of 1996 empowered the agencies to trace, intercepts and record calls and messages made by phone in the interest of national security. Although, the Fair Trial Act of 2013 provides a mechanism to interrupt citizen’s privacy that there shall not be “undue interference” in the privacy of citizens; however, it bears to note the term “undue interference” remains undefined. The Fair Trial Act 2013 is also silent on the consequences of wrongfully entering into citizen’s privacy by authorised officer. Similarly, PECB (Prevention of Electronic Crime Bill) 2015 is silent on the consequences of the wrongful intervention by the officer. There is no right available to citizens to know that why the warrant has been issued to intervene his privacy; which is the same criterion as previous laws allowing for curtailment of privacy rights.

There is no accountability for the authorised, the 2015 bill like all other laws leaves many question marks. Meaning thereby that an authorised officer can violate any of my rights as a citizen based on national security interests and if later the authorised find that he is after the wrong person, it seems there is little consequence for the officer.

The sacred character of Article 14 of the Constitution of Pakistan stands compromised. Defending PECA 2015 on undefined grounds of national security with extent to interrupting into citizen’s privacy shows the authoritarian underpinnings of our government towards our family life, relationships, home and secrecy which are protected by the Article 17 of the ICCPR (International Covenant on Civil and Political Rights, Pakistan is signatory to the covenant). Article 17 of ICCPR also provides the deserving right of everyone to the protection of the law against such interference into privacy. Whereas, if PECA 2015 has raised serious concerns over the national security ought to provide a framework fhow privacy of citizens shall be protected.

Beside all other criticisms on the bill, the privacy concern is the utmost criticism because the right of privacy remained always at stake from the very beginning of the independence of Pakistan. The authorities are so brawny to hold any citizen’s privacy, and such violation amounts to a form of mental torture to life of citizens. State failure to cope with terrorism and online security doesn’t means that the citizen’s privacy has to be at stake to ensure national security.

On the other side of the page international surveillance on the information systems of the citizens is inviting the bid to enter into our privacy on the ground of national security. Hence again the question is; if there is “undue interference” who shall be liable? Who shall be accountable? The burden to satisfy on the international surveillance is quite easy that they simply shall made reasons to belief that the person is involved in such activity.

As per the research report on “Digital Surveillance Laws in Pakistan” by ‘Digital Rights Foundation’ (DRF, a research centre for promotion of Digital Rights in Pakistan) confirms that Pakistan is in need of a separate legal framework for privacy and data protection to protect citizens privacy and for the protection of data of citizens. This report in aspect of IT Policy and Plan further elaborates that Federation has clearly failed time and again to protect privacy and data of citizens. The new law shall protect the privacy rights of the citizens in a manner that authorised agencies and officials shall have proper reports and proofs before interrupting into privacy, mere complaint shall not be the bases of interruption. It shall also be made necessary that the officials and agencies are accountable for their wrongdoings and the law shall be made strict for them

About the Author: The writer is an Associate at a law firm based in Islamabad. He frequently writes articles on human rights issues in Pakistan.

This article was originally published in QANOON BLOG (https://qanoonblog.wordpress.com) and is being published here with the permission of Editor.

Merger & De-Merger, Defined Generally

2016-10-15T18:41:00.000+05:00

Merger, de-merger and amalgamation are the terms proposed in the application of compromise, arrangements and reconstruction under the provisions of Companies ordinance 1984. These terms are used for the corporate entities. Primarily the focus will be on explanation of terms with reference to the procedure for merger and the requisites provided under the Companies Ordinance.

Amalgamation

Amalgamation is term used widely and covers the terms like merger, demerger and acquisition but at the same time it can be differentiated as neither of the combining companies survived as a legal entity: a complete new entity is formed with combined assets and liabilities of both companies. Now a day’s terms ‘merger’ and ‘consolidation’ are used often.

In general amalgamation can be defined as ‘union of two or more companies, made with an intention to form new company’.

In terms of finance it is defined as ‘an agreement between two or more companies to consolidate their business activities by establishing a new company having a separate legal existence’.

Reasons to amalgamate: Amalgamation increases shareholders value, reduces risk by diversification, improves managerial effectiveness and helps achieve company growth and financial gain.

Types of amalgamation: amalgamation can be made when two or more companies fused into one by merger or by taking over the company.

The term amalgamation can be further elaborated as

1: Amalgamating companies; those two or more companies which unite willingly to carry on their business activities jointly

2: Amalgamated Company; a new formed union of two or more amalgamating companies. It is separate legal entity with a new name.

Merger:

Generally merger can be defined as union of two existing companies into new company. Under contract law merger is extinguishment of one contract by its absorption into another, and is largely a matter of intention of parties.

Merger defined under the corporations as absorbing of one company by another, subsequently holding back its own name and identity and acquires assets, liabilities, capital and as a result the existing company ceased to remain as separate business entity. There are five types of mergers which exist usually.

Reasons for Merger: The rationale behind merger is to achieve economic stability, gain greater market, greater efficiency to carry out smooth and efficient management and corporate control.

Demerger:

Generally defined as ‘split or division of company into more number of companies’. The New Oxford dictionary defined it as ‘the separation of a larger company into two or more smaller organizations’. It is converse of a merger or acquisition.

This term is not defined under companies’ ordinance 1984. However, the concept of demerger can be deduced under sec 282 to 286.

We can explain demerger as business strategy in which a single business is broken into components, either to operate on their own, to be solved or to be dissolved. Basically Demerger splits off various components to invite or prevent an acquisition, to raise capital or to create separate legal entities to work more efficiently.

Procedure under the Companies ordinance:

Procedure for Merger is rendered under the Companies Ordinance 1984, these provisions permit companies to enter into a compromise or arrangement with its creditors and members with reference to merger and demerger of the companies.

Section 284 to 287 provides for procedure as well requisites to be full filled. Primarily when a compromise or arrangement is made between the companies and its creditors, an application is to be filled by the creditors or any member of the company for holding a meeting upon the direction of the court.

Whereas notice sent for meeting to creditor or member, must state terms of the compromise or arrangement and explaining its effect and also state any material interest of the directors including the chief executive of the company.

The arrangement shall be approved by a resolution passed by majority in numbers representing three fourths in value of the creditors , or members, as the case may be present, voting either in person or where proxies are allowed, by proxy at the meeting, agree to any compromise or arrangement.

Once the shareholders have approved the combination, the company must file application (petition) to the court for its approval on the proposition of arrangement, which addresses the particulars of the combination including issues of property, liabilities and debts of the companies, share swaps, the continuation of any legal proceedings, and dissolution, without winding up, of one or more of the concerned entities.

If the court is satisfied with a compromise or arrangement in respect of company, it may sanctioned the order for merger.

A certified copy of the order of the court shall be filed with the registrar within thirty days with the copy of every order shall be annexed to every copy of the memorandum of the company issued after that order has been made and filed as aforesaid.

If company makes default in complying with the requisites, the company and every officer of the company who is knowingly, willfully in default shall be liable to fine which may extend to five thousand rupees for each copy in respect of which default is made.

The topic continues and will be updated soon with further information.

Kamal Allegations: Question Of Fact?

2016-10-09T00:41:00.000+05:00

Joint venture of Mustafa Kamal and Qaim Khawani making allegations on Altaf Hussain and MQM for being involved with RAW, opens a new challenge for the government. The silence of the government is giving rise to questions; is the monarchy of Karachi still in the hands of MQM? The demand by Imran Khan to establish a Judicial Commission for the investigation is just. The question of fact is why governments of Musharraf, PPP and now PML (N), have been ignoring this matter for so long. The operation of security forces in Karachi should be questioned this: did they find any evidence regarding MQM involvement with RAW? These allegations are not new, which has also been acknowledged by every Leader of the Opposition or the Government. PPP, the ruling party of Sindh, has also zipped it lips regarding the issue. Establishment of a Judicial Commission is not a drawn-out process but the issue is how and what the evidence is which would be established in the court of law. On the other hand the joint-venture didn’t demand any kind of inquiry or investigation, nor did they lodge any FIR against the party even though they imposed such serious allegations.

From the legal point of view these allegations have severe effects on the writ of state.Section 15 of the Political Parties Order 2002 clearly indicates that if the federal government is satisfied that a political party is foreign-aided and aims to harm sovereignty and integrity of Pakistan, then the federal government has power to ban the party and refer the matter to the Supreme Court within fifteen days, where the reference of the Supreme Court shall be final. If the security forces operating in Karachi, or if Kamal and Qaim Khawani establish any evidence in the court of law, then the matter will be pursued in the context of international law whereby Chapter VII of the UN Charter entails that every state has a duty to refrain from organising, instigating, assisting or participating in terrorists acts in another State, or acquiescing in organised activities within its territory directed towards the commission of such acts. These efforts were continued through the Resolutions of 1999, 2001 and 2005 subsequently. If the basis of evidence can been established then no one can stop Pakistan to take the Indian government to the international court of law. The involvement of RAW in Balochistan is another question of fact. We are confronting Indian brains with guns; why we are not going for the legal fight?

There is no extradition treaty or any mutual legal assistance between London and Islamabad to bring Altaf back. However, on the basis of the evidence the matter can be pursued in the courts of United Kingdom. The only thing which is of utmost attention is the seriousness of the government regarding the question of fact as to how Indian brains are destabilizing Pakistan and what are the available remedies.

Shaheed Qadri Vs Media Vulgarity

2016-10-09T00:34:00.000+05:00

Protesters in support of ‘Mumtaz Qadri’s verdict of killing Salman Taseer’ demanded to “diminish obscenity and vulgarity from Pakistani Media” which was seconded by a very senior Minister of Federal Government in a talk show that is quite popular. According to him there are many TV channels in the industry which could not be watched along with family. Representatives of protestors believed that Western culture, Indian dresses and themes are promoted on these channels which are not really a part of our culture. They also raised another demand that there shouldn’t be any amendment in the blasphemy law i.e. Article 295-C of Pakistan Penal Code 1860 while Nizam e Mustafa (PBUH) should be enforced throughout the country. Prior to negotiations, the most highlighted demand of the protesters was to add ‘shaheed’ or ‘martyr’ with the name of Mumtaz Qadri, along with the execution of the sentence imposed on Asia Masih. However, both demands were retreated. Why?

The protesters who joined hands in the name Mumtaz Qadri backed off from the two main demands and finally pointed out that vulgarity and obscenity of the media of Pakistan is one of the prominent issue.

Does Nizaam e Mustafa entail to cover women with burqah or let them choose to wear it?

How can you connect Nizaam e Mustafa and blasphemy with vulgarity of media?

Do they mean that this vulgarity on media led towards blasphemous issues?

Dear mullahs please figure it out. It has become hard to understand.

A very senior anchor while having this discussion on TV also highlighted the abusive language used by protesters and asked why it wasn’t vulgarity or obscenity to use such language in a public place. He also pointed out that besides dressing is there also the usage of abusive language on TV shows, while the law on using such language in public places is quite clear, as referred to in Section 294 of the Pakistan Penal Code 1860.

Moreover, ‘hate speech’ was made by different leaders from among the protesters, which was not invoked by the capital’s administration. Some believe that the protesters were unaware of the fact that making such remarks and using abusive language for the Supreme Court, Army Chief and different government officials doesn’t constitute hate speech, vulgarity or obscenity as all of these are limitations to the freedom of expression. The state needs to identify and connect these terms under the law whereas Salman Taseer believed that calling blasphemy a ‘black law’ is his right protected by the Constitution; the mullahs’demand to prevent vulgarity and obscenity from Pakistani media is a restriction on their freedom; using abusive language and proclaiming hate speech in public is another limitation on ‘free speech’, especially while addressing the institutions of Pakistan; and at the end where a common citizen believes that ‘freedom of expression’ is his or her right to hold an opinion and express freely. The right to ‘freedom of expression’ doesn’t allow anyone to question or critically analyse Islam, this right is only available to mullahs in this Islamic republic. There is another restriction on this right where no one can raise questions on the life of Prophet (PBUH) or critically analyse it. The fact known to me is that Islam is the religion of tolerance, broad-mindedness and peace, which protects the rights of everyone without discrimination of religious beliefs.

After the execution of Mumtaz Qadri some believed that the government of Pakistan was moving towards the right direction, but now their belief has changed again; they say that it is strictly in the direction of the right wing. That doesn’t really imply that they should move towards the ‘left’, but we need to identify our values, our culture, and heritage in respect of the freedom of expression. There should be in place certain standards of vulgarity and obscenity before raising the issue with PEMRA. The media have paid for their freedom, whereas I believe that no mullah is allowed to take over the freedom of media and impose the tyranny of conservative Islam. Islam is never conservative, its liberalism is even beyond the policies of PEMRA or other laws of Pakistan. Raising objection on the dressing of women is a petty issue but mullahs still seem trapped in issues of vulgarity and obscenity; they don’t prioritize other issues in the country and are not ready to assist the public or the state in that regard. No one is anti-mullah, anti-Islam but the mullahs certainly need a direction.

Leveraging Netizens into Litigation

2016-10-09T00:25:00.000+05:00

Communication is an essential part of the human life when it comes to interacting and maturing our society. We have taken communicating to a new level known as: social media and social networking. This impression affects us numerous of ways and nowadays we can access it at all times, because we are carrying it with out at all times: through our cellphones and latest gadgets. The phenomenon social media is like a coin with two sides: it has both negative and positive consequences.

Now a days Facebook, YouTube, LinkedIn, twitter, etc have become a part of ours social and cultural vocabulary. Even if anyone who is unconscious about advancing technologies is well perceived about social networks through proclamation of electronic or print media because every Pakistani is in touch rather with the first one or second. Social media is creating new ways to communicate, communications were never so easy and of access now a days. With the purpose of connect and communicate all over the world social media is a low cost ease of access. It is also a surge of interest for different businesses and advertising with a very low cost or without any cost. Companies of different categories at the present time must have a social media link, where their products are shown with their features and price intending to sale. Social media gives large and small businesses a direct way to interact with existing and potential customers, and promote their product and services. Some of the companies provide online services of consultation etc. Many companies got service of delivering goods at door step but first you have to order it online. Then the product is delivered and one comes to know that this is not the same product which order was placed (as shown on screen). Some other scams related to marketing and productions could be found on newspapers.

Be it a politician, social worker, innovationist, journalist, blogger, columnist, engineer, doctor or leader “have your say” and publish it to large audience spanning across the world. Globalizing in a new manner, sharing your views, ideas, opinions, thoughts, and creations around the globe . The people from middle class background can’t afford expensive measurements for communication such as electronic or print media. They can express at absolutely no cost or mere with the cost of service provider charges. Washington University research shows that there were 3 million tweets daily regarding revolution of Egypt, millions of them are now a day can be seen about Ukraine protests and the social media usage. Similarly in Pakistan the Insafian party led by Khan is also well known due to social media and some analyst vis-a-vis social media 70% for its popularity. Many of the users maltreat government even abusing them publicly. Sharing pictures of our senior government officials with abusive comments and making fun of them is common. Examples of Chief Justice Pakistan and Army Chief of Pakistan could be highly considered.

Other issues regarding social media are of corporations where they are hiring officials for theirs company. They use social network for calling up resumes and cover letters. The resume could be false calling the question under the Section 420 of PPC, well known section of Fraud and Cheating. Corporation’s copyrights, trademarks and patents could also be pirated and each of them has separate law for them. Harassing and blackmailing is somehow becoming common in big and even in small corporations.

When someone is sharing opinion on any social network there must be opposition, condemnation, rejection or objection about it. This objection led to debate and while debating one may forgot the ethics, moral and laws lay down, finally debate could breach law. One may set his own rules and regulations on his blog but the others don’t care because they know there is no hanger waiting for them if they are going to violate only the blogger may remove them from his own blog. Recent sectarian violence in Rawalpindi and its aftershocks on social media could be indicated that what was going on “share a post calling any sect “kaafir” and then bestowing fatwas on each other referencing Holy Hadiths and Verses of Holy Quran. Using both of sacredly respected sayings of God and Prophet (P.B.U.H) for own purpose by some of extremist wings.

Some cases are also observed related to blackmailing, assaulting and harassing must also be mentioned under the proceedings of District Courts and High Courts. Copying the snaps of girl from network and then making her fake account is simply the matter under the provisions of Pakistan Penal Code and also a criminal breach of trust.

Section 351 states “Whoever makes any gesture, or any preparation intending or knowing it to be likely that such gesture or preparation will cause any person present to apprehend that he who makes that gesture or preparation it about to use of criminal force to that person, is said to commit an assault.

Law also inculcate that what’s the provision of copying without permission and blackmailing under the provisions of criminal law. Other aforementioned cases of Instigating, public nuisances, abusing also got full-fledged laws relevant. Such as law related to the abuse of government is sedition, sedition means “conduct, speech, publishing or writing inciting people to rebel against the authority of a state or monarch” law of sedition under Pakistan Penal Code clearly express that whoever by words, either spoken or written, or by signs, or by visible representation, or otherwise brings, or attempts to bring into hatred or contempt, or excites or attempts to excites disaffection towards the Federal or Provincial Government established by law shall be punished with the imprisonment of life to which fine may be added, or with imprisonment which may extend to three years, to which fine may be added, or with fine.

Such as selling products falsely the Sales good act, Contract act, Consumers act and some provisions of Pakistan Penal Code deals with it. Several sections of Pakistan's Criminal Code comprise its blasphemy laws, 295 forbids damaging or defiling a place of worship or a sacred object, 295-A forbids outraging religious feelings, 295-B forbids defiling the Quran, 295-C forbids defaming the Islamic prophet Muhammad.

One can never forget that on June-2010, Pakistan’s Deputy Attorney General Muhammad Azhar Siddique lauched a criminal investigation into Mark Zuckerberg and other co-founders of Facebook after a “Draw Muhammad” contest was held over there. The investigation named the anonymous German woman created the contest. Deputy Attorney asked the country’s police to contact Interpol to have Zuckerberg and three others arrested for blasphemy. On May 19-2010 Facebook website was temporarily blocked in Pakistan, until the removal of contest. But no one was ready to make an apology to Muslims. Siddique also asked UN representative to raise issue with United Nations General Assembly. Same kind of issue is now with YouTube due the Blasphemous movie resulting in permanent blockade of respective website. Now Pakistani government is facing litigation against its blockade. Litigants are persuading that there should be some arrangements with every social network that the unwanted objects or forbidden one must be censored. Petitions are pending in Lahore High Court find themselves hindrances because there is no clear policy or law to block or censor unwanted substances. This is only the legislation what the houses need to do with Social Networks.

All of the porn sites are now blocked in Pakistan because there was the violation of law mentioned in Pakistan Penal Code Section 292 and 293 sale of obscene items. As per the same there are laws present calling netizens into litigation but the issue is of Jurisdiction and it should be announced that while using Social Media the laws must be under the consideration of users and it should be provided by the service provider. The state you living within, what kind of law it have and what are the consequences. Other leading question is the persons having more than one account how they could be grabbed in the Net of law? Answer is simple, what the government did with the mobile customers. There should be NADRA verification system for the users that he cannot make more than one account on any of Social media network and NADRA system must verify its social network account the users under 18 of age must have smart card verification system launched a short time ago by NADRA.

Online platforms for interactive dialogue are infringing NATIONAL LAWS OF PAKISTAN. There may be new legislation for aforementioned cases but old legislation could also be measured under circumstances where executive of the country may have power to exercise under the policy. This policy may be that the laws are present just bring social media under it.

Many European countries have social media laws. America and Canada as developers of Social Media got a vast research in Social Media laws even they have systems of bringing Social Media evidence in the court, avoiding social media litigation processes and advises by lawyers to client, copyrights, trademarks and a long list of laws redirecting to social media. South Asian nations are also legislating for these issues but in Pakistan it is still being ignored. Howsoever growing case laws are appealing social media into litigation.

There must be also a code of conduct while having an internet connection that what kind of laws is apparent to usage and how to use it. There must be setup with the service providers of government to leverage the product under the laws of Pakistan. There are many other issues that affect our state day in and day out. Many individuals see these dilemmas very differently; offering up various solutions to fix them and even various proposals as to why they occur. However, because of the unpredictability in the frequency and method of social media, they cannot be eradicated and therefore they must try to simply be contained. Social Media has shown that there are many different views and opinions on different prominent issues and because of that, often, no one can be "right or wrong." The only thing that can be offered is a law; a law to make the situations better or the occurrences less frequent; however, often law is given need a policy. This is why we, each and every one of us, cannot give up. The only way to improve these situations, let alone solve them, is to keep trying and to keep listening to what EVERYONE, not just the ones who agree with us, have to say. I hope that government of Pakistan have put up these all issues related to Social Media legislation in a pipeline and soon the public will see results.