318/2023 Suit MUHAMMAD AYUB TAREEN & OTHERS (Plaintiff) V/S JS BANK LIMITED & OTHERS (Defendant)
Sindh High Court
Bench: Hon'ble Chief Justice Mr. Justice Muhammad Shafi Siddiqui(Author)
Order Date: 27-JUN-23
-A subsidiary as defined in Section 2(68) of the Companies Act, 2017, which can only exist in relation to a holding company in which the holding company either (i) controls the composition of the Board of the subsidiary or (ii) exercises or controls more than one half of its voting securities. Viewed in this context and in particular read with Section 23 of BCO, it is clear that the word ???form??? used in this section clearly envisages the forming of a subsidiary by acquisition either by control of composition of its Board or control of more than half of its shareholding by way of acquisition under the Regulations, 2017. This is further strengthened by the fact that Section 23(1) uses the term ???formed??? in past tense in respect of the subsidiary being taken over by Banking Company. So it envisages a subsidiary which is being formed or was already formed. --The objective behind and mischief sought to be avoided by Section 23(1) is to bar more than one commercial banking license within a group save where a subsidiary is engaged in Islamic banking. Whether the subsidiary is a newly formed company or formed by way of acquisition of its majority shareholding, is immaterial to that objective.Full judgment text for this case is not yet available on Pakistan Law Reports. Check the official Sindh High Court case law portal for the complete order.
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