Vous êtes sur la page 1sur 7

W.P.No.31903 of 2012.

Muhammad Masood.

28.12.2012.

Bank of Punjab.

Mr.Shazib Masud, Advocate for the petitioner.


Through this constitutional petition, the petitioner
seeks a declaration that appointment of M. Yousuf Adil
Saleem & Co. (MYASCO) a firm of Chartered
Accountants as external auditors of the Bank of Punjab is
illegal and invalid. A direction is sought to the Bank of
Punjab to appoint some other firm of Chartered
Accountants with credible standing as external auditors,
which is duly QCR rated and fully in compliance with
the statutory requirements for carrying out the financial
audit of the Bank of Punjab for the financial year ending
2012. A direction is also sought to respondent No.4
Securities and Exchange Commission of Pakistan
(SECP) and respondent No.5, State Bank of Pakistan to
remove the name of MYASCO from the panel of
Chartered Accountancy Firms qualified for audit of listed
entities and financial institutions.
2.

The facts in brief necessary for the purpose of this

petition are that the petitioner claims to be a minor


shareholder of the Bank of Punjab, respondent No.1. It is

W.P.No.31903 of 2012.

alleged that respondent No.1 has appointed MYASCO as


its external auditors in violation of the listing regulations
of the Stock Exchanges, Code of Corporate Governance
and the regulations issued by the State Bank of Pakistan
relating to categorization of the firms of Chartered
Accountants for undertaking external audit work of
banking companies. It is submitted that in order to
protect the interests of shareholders/depositors and public
at large, the relevant statutes have incorporated stringent
requirements and criteria for appointment of auditors
which have been violated by the Bank of Punjab by
appointing MYASCO as its External Auditor.
3.

The learned counsel for the petitioner submits that

being a listed company, Bank of Punjab is required to


appoint only a firm of Chartered Accountants which has
been given satisfactory Quality Control Review (QCR)
by the Institute of Chartered Accountants of Pakistan
(ICAP) and meets the criteria established by the State
Bank of Pakistan for inclusion in the panel of auditors.
This requirement is also mandatory under the listing
regulations of Stock Exchanges and the Code of
Corporate Governance issued by SECP adopted by the
Stock Exchanges. It is argued that despite the fact that
QCR rating of MYASCO has been held in abeyance until

W.P.No.31903 of 2012.

October 31st, 2012 consequent to legal complications


arising from the review of all of its offices, the said firm
has been appointed as its External Auditor by the Bank of
Punjab. According to the learned counsel the partners of
MYASCO are also locked in litigation against each other
which is pending before various courts of competent
jurisdiction. The said firm is therefore in no position to
undertake the serious work of acting as external auditor
of a Bank which is already reeling under scandals of
misappropriation and mismanagement. He finally argues
that the firm has been appointed for extraneous
consideration by ignoring all relevant rules, regulations
and laws on the subject.
4.

I have heard the learned counsel for the petitioner

at length and have also gone through the record. The


main question requiring determination by this Court is
Whether in the facts and circumstances narrated above,
this Court is required to interfere in this matter in
exercise of its constitutional jurisdiction? On hearing the
learned counsel for the petitioner and examination of the
relevant laws, rules and regulations on the subject, the
answer has to be in the negative for the following
reasons:-

W.P.No.31903 of 2012.

a)

Admittedly MYASCO was appointed as the

external auditor of the Bank of Punjab by the Board of


Directors of the said bank. Bank of Punjab is a listed
company and its Board of Directors acts in a
representative capacity. If at all the Board of Directors
has acted illegally or in violation of the rules, the remedy
of the petitioner lies in approaching the regulator i.e.
SECP by bringing to its attention that the Board of
Directors and the Annual General Meeting were not
informed of the material which is allegedly available
against MYASCO that disentitles it from being appointed
as external auditor. I have asked the learned counsel for
the petitioner if the petitioner has moved any application
with the SECP. It appears that the petitioner has not done
so.
b)

The petitioner also alleges that failure of an

auditing firm in securing a satisfactory quality control


review after every two years from ICAP can lead to its
category being down graded or it being de-listed by the
State Bank of Pakistan. Therefore, in addition to the
remedy available to the petitioner to approach SECP,
another avenue available to the petitioner is to approach
the State Bank of Pakistan (which is the regulatory
authority for all banks) to point out the alleged illegalities

W.P.No.31903 of 2012.

and irregularities and violation of its circulars committed


by the Bank of Punjab in appointment of MYASCO as its
external auditor. This avenue has also not been explored
by the petitioner.
c)

ICAP and its Quality Assurance Board regulate

auditing and accounting profession in Pakistan which


inter alia includes Standard Setting, Quality Control and
Investigation. Quality Assurance Board is an independent
body set up by ICAP as per its framework of Quality
Control Board Review Program. Admittedly it has 14
members and is tasked to ensure adherence to various
standards by firms of auditors and to review and confirm
the Quality Control rating of firms of auditors. In case
there is any ambiguity in the QCR rating of the firm, the
petitioner is at liberty to approach ICAP as well as its
Quality Assurance Board to seek clarification of the
status of MYASCO. This approach also appears to have
been avoided by the petitioner.
d)

Surprisingly enough, the petitioner has not

impleaded MYASCO as one of the parties to this


petition. It may be noted that the said firm was a
necessary party to this petition in view of the fact that
any order passed by this Court would have directly
affected the said firm.

W.P.No.31903 of 2012.

e)

Admittedly, there are a number of specialized

regulatory authorities present before whom, the petitioner


could have agitated the matter and pointed out alleged
illegalities which according to him have been committed
in appointment of external auditors of the Bank of
Punjab. The said regulators have adequate and sufficient
powers available to them under the respective governing
statutes to take cognizance of the matter and pass such
orders as may be necessary under the law, rules and
regulations.
f)

Even otherwise, the allegations made in the

petition need a factual inquiry, which cannot be


undertaken in exercise of extraordinary constitutional
jurisdiction of this Court. Specialized Agencies and
regulators which are available under the law are more
suited to undertake such exercise and pass appropriate
orders.
g)

It may also be noted that annual report of the Bank

of Punjab and the statement of financial position of the


said bank as on 31.12.2011 is due on 31.12.2012.
Declaring the appointment of external auditors as illegal
and invalid at this stage and appointing another external
auditor at the fag end of the year on the basis of material
placed before this Court, would neither advance the ends

W.P.No.31903 of 2012.

of justice nor would it benefit the shareholders/depositors


of the Bank of Punjab. Should the petitioner consider it
necessary and approach the aforenoted regulatory
authorities, they have the requisite powers to take such
remedial actions if necessary as may be advisable under
the law considering the facts and circumstances of the
present case.
h)

This petition also suffers from laches as the petitioner

has chosen to remain quite since the last AGM when the
Board of Directors appointed MYASCO as External Auditors
of the bank.
i)

Finally, I am not entirely satisfied about the locus

standi of the petitioner to maintain this petition and invoke


the extraordinary constitutional jurisdiction of this Court.
5.

For reasons recorded above, interference in the matter

in exercise of extraordinary constitutional jurisdiction of this


Court is declined. The petitioner may, if so advised, approach
the regulatory authorities in appropriate proceedings. If and
when this is done, this Court is sanguine that the regulatory
authorities shall examine the matter and act strictly in
accordance with law in an expeditious manner.
6.

Petition dismissed.

(IJAZ UL AHSAN)
JUDGE
A.Rehman.