UNITED INSURANCE COMPANY LIMITED vs The DIRECTOR/HOD, ADJUDICATION-I, ADJUDICATION DIVISION, SECURITIES AND EX

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UNITED INSURANCE COMPANY LIMITED VS The DIRECTOR/HOD, ADJUDICATION-I, ADJUDICATION DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD Ss. 32(2)(g) & 32(7)---admissible assets---Balances / amounts etc. due from "related parties"---"Direct" and "indirect" ownership---Securities and Exchange Commission of Pakistan ('Commission') assuming the role of the legislature, allegation of---appellant (Insurance Company) was penalized by the Securities and Exchange Commission of Pakistan ('Commission') for misreporting regarding admissible assets---assertion of the appellant was that related party status could only be determined through direct shareholdings and by including indirect shareholdings while calculating "ownership" stake of "related parties", the Respondent / Commission, violated the principle of casus omissus, had assumed the role of legislature---Validity---The term "ownership" used in S. 32(7) of the Insurance Ordinance, 2000, does not provide that "ownership" means only "direct ownership"---The term "ownership" includes direct as well as indirect ownership interest---If the appellant's assertion (that related party status could only be determined through direct shareholdings was held to be correct then one may defeat the purpose of the law by acquiring more than 49% ownership interest through indirect ownership interest---Such a flawed interpretation would defeat the purpose of S. 32(2)(g) of the Insurance Ordinance, 2000, which states that "related party", receivables are not admissible for the calculation of solvency---Thus, by considering "direct" and "indirect" ownership while establishing related party status under S. 32(7) of the Insurance Ordinance 2000, the Respondent had not assumed the role of the legislature---additionally, there was no legislative deficit or fault in the relevant statute, thus the appellant's argument that the law was being applied was beyond what the legislature intended was baseless---Provision was explicit and it referred to "ownership" which included "direct" as well as "indirect" ownership---Misreporting of financial facts was a serious violation and the misreporting of admissible assets by the appellant for calculation of solvency had been duly established by the Respondent which included "related party" receivables while calculating solvency---appeal, filed by Insurance Company, was dismissed.

UNITED INSURANCE COMPANY LIMITED vs The DIRECTOR/HOD, ADJUDICATION-I, ADJUDICATION DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD Ss — 2025 CLD 903 SECURITIES-AND-EXCHANGE-COMMISSION-OF-PAKISTAN

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