adaptation and convergence in corporate governance to international norms in pakistan

Glasgow Theses Service







Khan, Imtiaz Ahmed (2014) Adaptation and convergence in corporate
governance to international norms in Pakistan. PhD thesis.







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Adaptation and Convergence
in Corporate Governance
to International Norms
in Pakistan

IMTIAZ AHMED KHAN

Submitted for the Degree of Doctor of Philosophy

School of Law
College of Social Sciences
University of Glasgow


© Imtiaz Ahmed Khan January 2014

ii


iii

ABSTRACT
This thesis discusses the adaptation and convergence in corporate governance to
international norms in Pakistan. Pakistan is an underdeveloped but an emerging market
with inefficient legal, regulatory, judicial, institutional and governance norms. In recent
times there have been some reforms in the corporate sector of Pakistan but lack of

infrastructure and a dearth of research were barriers to reform generally. Therefore, this
thesis seeks to identify corporate governance issues in Pakistan, and discusses analytically
the possibility and effectiveness of convergence in corporate governance to international
norms in Pakistan.

To this end, it focuses on three aspects of convergence in corporate governance in
Pakistan. First, it discusses the prospects and application of convergence in corporate
governance in Pakistan. Second, it analyses critically, from a comparative perspective,
three core corporate governance issues in Pakistan. The corporate sector in Pakistan is
highly concentrated with an underdeveloped capital market and inefficient enforcement
mechanisms. The conflict between shareholders and management, and shareholders inter
se are major issues of corporate governance in Pakistan. The former conflict is addressed
by reducing agency cost and the latter by ensuring minority protection. These conflicts are
analysed comprehensively through comparative studies. Furthermore, the market and
judiciary in Pakistan have failed to provide investors with protection. This thesis discusses
the reform process in the market and judiciary in order to improve enforcement
mechanisms. In addition, it discusses the possibility of convergence and effectiveness of
adaptation in these issues. Third, as Pakistan is an ideological country whose constitution
prescribes Islam as the state religion which, in turn, prescribes Islamic injunctions as basic
norms, convergence to any foreign corporate governance feature will have to pass the
litmus test of Islamic norms. Therefore, the thesis also identifies the possibility of filtration
of foreign governance features through Islamic norms.

The thesis concludes that the corporate sector in Pakistan is underdeveloped with weak
investor rights and enforcement mechanisms. There is, therefore, a need to enhance
investor protection in order to improve corporate governance which, in turn, will improve
the economy of the country. In addition, the conclusion is reached that in convergence to
Western corporate governance features in Pakistan, Islamic norms may act as a litmus test
which may not be as problematic as it appears at first sight.

List of Publications

1. Imtiaz Ahmed Khan, ‘The Role of International Financial Institutions in Promoting
Corporate Governance in Developing Countries: A Case Study Of Pakistan’ (2012)
23 (7) International Company and Commercial Law Review 223-233

2. Imtiaz Ahmed Khan, ‘The Fiduciaries Duties and Investor Protections in the
Corporate Law of Pakistan’ 35 (5) Company Lawyer 146-157

3. Imtiaz Ahmed Khan, ‘ The Unfair Prejudice and Investor Protection Remedy in
Pakistan’ (2014) 5 Journal of Business Law 389-408

4. Imtiaz Ahmed Khan and Iain MacNeil, ‘ Enforcement in Relation to Corporate
Governance in Pakistan’ (Submitted)




Acknowledgments

First of all, I would like to express my deepest gratitude to Allah Almighty for His
blessings which enabled me to complete this work.

I owe Professor Iain MacNeil a great debt of gratitude for his continuous advice and
guidance, and persistent encouragement which enabled me to achieve this goal. He has
been a great mentor and will remain a constant source of inspiration to me. I also thank
him for correcting numerous mistakes and suggesting many ideas to improve the quality of
this work.

Thank you to all my family members, especially my late mother and father who always
prayed for me while they were still alive. My parents were my greatest mentors and a
permanent source of encouragement throughout their life, and would continue to inspire
me for the rest of my life. I learnt spiritual guidance from my mother, and hard work and
self-reliance from my father. Thanks are also due to my dearest brothers, Iftikhar Ahmed
Khan and Faisal Shehzad; my sisters, Nasim Nisar, Riffat Yasmin and Rubina; and my
sister-in-law, Saba, for their constant moral support and patience over the course of four
years. I would like to make special mention of my nephew, Affan; and nieces, Areeba and
Arfah, for their innocent conversations over the telephone which always helped to restore
my energy after many stressful working hours at the university.

A special thanks to all my friends and co-workers in Pakistan for their support and
encouragement. In particular, thanks to Nazir A Shaheen, M. Saleem, Ch M Aslam, Safdar
AK, R Amanullah, I Ghaus, Waseem AK, M. Akhtar, Khalid M, AS Khan, A. Iqbal and
M. Zia. I am especially thankful to Dr Muhammad Abrar for his wonderful company at
home and university: I cannot forget his help during the earlier years while I was settling
down in Glasgow. I am thankful to my friends in Glasgow, in particular, M Umar Qureshi
for his company, and to the members of the university student and staff cricket club.

I also acknowledge the contributions of teachers and staff of the School of Law at the
University of Glasgow, and the excellent research facilities provided by the university.

vi

Last, but not least, I am also grateful to Bahauddin Zakariya University and the Higher
Education Commission of Pakistan for immense financial support, without which it would
not have been possible for me to undertake PhD studies in the United Kingdom.

vii

Declaration

I hereby declare that, except where explicit reference is made to the contribution of others,
this dissertation is the result of my own work and has not been submitted for any other
degree at the University of Glasgow or any other institution.

Section 2.8 of Chapter Two and Section 3.7.3.1 of Chapter Three has been published in the
Company and Commercial Law Review.
Section 4B.6.3 of Chapter Four has been published in Company Lawyer.

Section 4B.6.4.2 of Chapter Four has been published in Journal of Business Law.

________________________
Signature
IMTIAZ AHMED KHAN


________________________
Dated

viii

Contents

ABSTRACT iii

List of Publications iv

Acknowledgments v

Declaration vii

Religious Sources xvi

Laws, Rules, Regulations and Codes xvi

Cases xix

CHAPTER ONE: INTRODUCTION TO THESIS 1

1.1

The concept of convergence 1

1.2

Research objectives, issues and questions 3

1.3

Research methodology 4

1.4

Structure 5

CHAPTER TWO:

THE NATURE AND OBJECTIVES OF CORPORATE
GOVERNANCE 7

2.1

Introduction 7

2.2

Corporate governance 7

2.3

Theory of the firm 9

2.4

Theories of corporate governance 11

2.5

Objectives of corporate governance 15

2.5.1

Accountability 15

2.5.2

Financial performance 16

2.6

Structures of corporate governances 18

2.6.1

Dispersed ownership or market-based governance structure 18

2.6.2

Concentrated ownership or block-holder governance structure 20

2.6.3

The governance structure of state-owned enterprises 21

2.6.4

The governance structure of family-based enterprises 22

2.6.5

Which system is better? 22

2.6.6

Religion 23

2.7

Historical development of the corporate sector in Pakistan 24

2.8

The nature of the corporate sector in Pakistan 27

2.8.1

Voting in the corporate law of Pakistan 29

2.8.2

The judiciary and enforcement mechanism in Pakistan 29

ix

2.8.3

Institutional investors and corporate governance in Pakistan 29

2.8.4

Compliance with the Code of Corporate Governance in Pakistan 30

2.9

Sources of corporate governance 30

2.9.1

Company law 30

2.9.2

Securities laws 31

2.9.3

The company constitution 31

2.9.3.1

The articles of association 31

2.9.3.2

The memorandum of association 33

2.9.4

Listing rules 33

2.9.5

Codes of corporate governance 34

2.10

Elements of corporate law that support good corporate governance 35

2.10.1

Shareholders’ rights generally 35

2.10.2

Minority rights 40

2.10.3

Division of power between shareholders and the directors 41

2.10.4

Procedure and power to issue shares 42

2.10.5

Voting rights 42

2.10.5.1

Pre-emptive rights 45

2.10.5.2

The cumulative voting system 46

2.11

Conclusion 50

CHAPTER THREE:

CONVERGENCE THEORY AND ITS APPLICATION IN
PAKISTAN 52

3.1

Introduction 52

3.2

Convergence theory 53

3.3

Kinds of convergence 54

3.4

Factors that compel convergence 56

3.5

Factors that compel divergence 60

3.5.1

Path dependency 60

3.5.2

Complementarities 62

3.5.3

Politics, private rent seeking and control premium 64

3.5.4

Difference in culture, ideology and politics 65

3.6

Unique convergence in corporate ownership and corporate governance 66

3.7

The application of theory in Pakistan 69

3.7.1

Process of law making and standards setting in Pakistan 69

3.7.2

Development of a code of corporate governance 76

x

3.7.3

International corporate interaction with Pakistan: An inward focus 80

3.7.3.1

The role of international financial institutions in Pakistan 80

3.7.3.2

Adoption of international standards 85

3.7.3.3

The role of international investors 87

3.7.3.4

Institutional investors and corporate governance in Pakistan 91

3.7.4

Internationalization of Pakistani companies: An outward focus 92

3.7.4.1

Foreign listing by Pakistani companies 92

3.7.5

Convergence Theory and Pakistan 93

3.8

Conclusion 96

CHAPTER FOUR:

AGENCY COST AND MINORITY PROTECTION IN
CORPORATE GOVERNANCE IN PAKISTAN 98

4.1

Introduction 98

4A

Agency cost in corporate governance 99

4A.1

The nature of agency cost 99

4A.2

Causes of agency cost 101

4A.2.1

Separation of ownership and control 101

4A.2.2

Incentives for private rent seeking and expropriation 102

4A.3

Reduction of agency cost 106

4A.3.1

Ex ante and ex post mechanisms 106

4A.3.2

Separation of control and monitoring 106

4A.3.3

Shareholder activism and institutional investors 107

4A.3.3.1

Institutional investor activism in Pakistan 111

4A.3.4

Legal protection 113

4A.4

Conclusion 114

4.B

Minority protection in corporate governance in Pakistan 115

4B.1

Introduction 115

4B.2

The LLSV theory 115

4B.3

Critique of the LLSV theory 118

4B.4

Minority protection and its importance 121

4B.5

Importance of minority protection in Pakistan 122

4B.6

Minority protection mechanism 125

4B.6.1

Pre-emptive rights 126

4B.6.2

Cumulative voting system 126

4B.6.3

Conflict of interest of the fiduciaries 131

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4B.6.3.1

Introduction 131

4B.6.3.2

Related party transactions 132

4B.6.3.3

Doctrine of corporate opportunity 137

4B.6.3.4

Fiduciary duties and the shareholders 153

4B.6.4

Intervention rights 155

4B.6.4.1

Derivative action 156

4B.6.4.2

The unfair prejudice remedy in Pakistan 167

4B.6.5

Just and equitable winding up in the UK 186

4B.6.5.1

Nature and scope of the remedy 186

4B.6.5.2

Implications 187

4B.6.5.3

Grounds for just and equitable winding up 188

4B.6.5.4

Role of unfairness 188

4B.6.5.5

Requirement of clean hands 189

4B.6.5.6

The unfair prejudice remedy and just and equitable winding up
189

4B.6.5.7

Just and equitable winding up in Pakistan 191

4B.7

Conclusion 192

CHAPTER FIVE:

ENFORCEMENT IN RELATION TO CORPORATE
GOVERNANCE IN PAKISTAN 198

5.1

Introduction 198

5.2

Enforcement issues in corporate governance 199

5.3

The role of the judiciary in corporate governance 202

5.4

Judicial structure in Pakistan 204

5.4.1

Regular court structure in Pakistan 204

5.4.2

Administrative courts in Pakistan 205

5.4.3

Judicature in the context of corporate law in Pakistan 206

5.4.3.1

Judicature within the SECP 206

5.4.3.2

Appellate benches in the SECP 207

5.4.3.3

General judicature of corporate matters 207

5.5

The judiciary and its problems in Pakistan 208

5.5.1

Recent trends in the judiciary in Pakistan 210

5.6

Reform 212

5.6.1

Legal reform 213

5.6.2

Judicial reform 214

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5.6.3

Market reform 220

5.6.3.1

Stock market reform 220

5.6.4

Other segments of the market in Pakistan 229

5.7

Conclusion 230

CHAPTER SIX:

ISLAMIC INFLUENCE ON CORPORATE
GOVERNANCE IN PAKISTAN 232

6.1

Introduction 232

6.2

Ideology of Pakistan 233

6.3

Shariah (Divine law) and fiqh (Islamic law) 235

6.4

Sources of Islamic law 236

6.4.1

Primary sources 236

6.4.1.1

The Qur’ān (‘Holy Book’) 236

6.4.1.2

The Sunnah 236

6.4.2

Secondary sources (rational sources) 237

6.4.2.1

Ijma (‘Consensus of legal opinion’) 237

6.4.2.2

Qiyas (‘Analogy’) 237

6.4.2.3

Istihsan (‘Juristic preference’) 238

6.4.2.4

Istishab or ibahah (‘presumption of continuity’) 238

6.4.2.5

Maslahah mursalah (‘Extended analogy’) 238

6.4.2.6

Qawl al-sahabi (‘Opinion of a companion’) 239

6.4.2.7

Sadd al-dhar’i (‘Blocking the legal means to an illegal end’) 239

6.4.2.8

Urf (‘Custom’) 239

6.4.2.9

Islamic legal maxims 240

6.5

The purposes of Islamic law (Maqasid al-Shariah) 240

6.6

Applicability of the purposes of Islamic law in corporate governance 242

6.6.1

Public Interest and Convergence Theory 243

6.7

Precepts of Islamic finance 249

6.7.1

Prohibition on riba (‘interest’) 249

6.7.2

Avoiding uncertainty (or speculation or chance) 249

6.7.3

‘Profit and loss’ sharing or risk sharing 249

6.7.4

Asset-backed transactions 250

6.7.5

Prohibition on certain business activities 250

6.8

Schools of interpretation in the Muslim world 250

6.8.1

Shia School 250

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6.8.2

Hanafi School 250

6.8.3

Maliki School 251

6.8.4

Shafi School 251

6.8.5

Hanbali School 251

6.9

The nature of Islamic law 252

6.10

Shariah-compliant products 253

6.10.1

Musharakah (‘Partnership’) 254

6.10.2

Mudarabah (‘Partnership’) 255

6.10.3

Salam (‘Advance payment’) 257

6.10.4

Sarf (‘Money exchange’) 257

6.10.5

Sukuk (‘Islamic or revenue bonds’) 258

6.10.6

Takaful (‘Islamic insurance’) 259

6.11

The concept of a company under Islamic law 259

6.11.1

Legal personality 260

6.11.2

Limited liability 261

6.11.3

Transferable shares 263

6.11.4

Delegated management with board structure 267

6.11.5

Investor ownership 267

6.12

Functioning of a company under Islamic law 268

6.13

Definition of riba (‘interest’) 270

6.13.1

Riba al-Qur’ān (riba al-nasiah or riba by delay) 270

6.13.2

Riba al-Sunnah (or riba al-fadl) 271

6.14

Prohibition on riba 274

6.15

Nature of the Islamic financial system 277

6.16

Equity versus debt financing 278

6.17

Evolution of Islamic finance 279

6.18

Islamic finance as an alternative financial system 281

6.19

Islamic finance and stock market indices 288

6.19.1

Shariah-compliant index of the Karachi Stock Exchange 289

6.20

Convergence to Islamic finance and corporate governance within the Muslim
world 290

6.21

Convergence to Western corporate governance 291

6.22

Conclusion 293

CHAPTER SEVEN: CONCLUSION AND RECOMMENDATIONS 296

xiv

ANNEXURES 303

BIBLIOGRAPHY 318

xv

Figures

Figure 3.1: Companies delisted and merged during 1999–2013 72

Figure 3.2: FPI in Pakistan during 1996-2013 90

Annexure I: Pyramiding structure and its effects on control 303

Annexure II: Judicial structure in Pakistan 305

Annexure III: Administrative court structure in Pakistan 306

Annexure VI: Penalty structure in corporate law in Pakistan 315

Annexure VII: Corporate judicature in Pakistan 316

Annexure VIII: Listing structure in the United Kingdom 317


Tables

Table 2.1: Results of a regular voting system 48

Table 2.2: Results of a cumulative voting system 49

Table 3.1: Companies delisted on the KSE during 1999–2013 72

Table 3.2: Foreign Portfolio Investment in Pakistan during 1996-2013 89

Table 3.3: Foreign Companies in Pakistan as on 30.06.2013 90

Table 3.4:

Issuance of securities by Pakistani companies on overseas stock exchanges
93

Table 4B.1: Results of a resolution to remove a director 129

Table AIV.1:

Federal Administrative Courts and Tribunals in Pakistan 307

Table AV.1:

Provincial Administrative Courts and Tribunals in Pakistan 312




xvi

Religious Sources

The Qur’
ān (Holy Book for Muslims)

Traditions of Holy Prophet Muhammad (peace be upon him)

Laws, Rules, Regulations and Codes

Pakistan

The Anti-Terrorism Act, 1997

The Code of Corporate Governance of Pakistan

The Companies (Amendment) Ordinance, 2002

The Companies Act, 1913

The Companies Ordinance, 1984

The Companies Share Capital (Variation in Rights and Privileges) Rules, 2000

The Constitution of the Islamic Republic of Pakistan, 1973 (the Constitution, 1973)

The Control of Narcotics Substances Act, 1997

The Criminal Procedure Code, 1898

The Customs Act, 1969

The Drugs Act, 1976

The Emigration Ordinance, 1979

The Federal Tax Ombudsman Ordinance, 2000

The Financial Institution (Recovery of Finance) Ordinance, 2001

The Government of India Act, 1935

The Import and Export (Control) Act, 1950

The Income Tax Ordinance, 2001

xvii

The Industrial Relation Ordinance, 2002

The Insurance Ordinance, 2000

The Listed Companies (Substantial Acquisition of Voting Shares and Take-overs)
Ordinance, 2002

The Listing Rules of the Islamabad Stock Exchange

The Listing Rules of the Karachi Stock Exchange

The Listing Rules of the Lahore Stock Exchange

The Manual of Code of Corporate Governance issued by the Securities and Exchange
Commission of Pakistan

The National Accountability Bureau Ordinance, 1999

The Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003

The Non-Banking Finance Companies and Notified Entities Regulations, 2007

The Non-Banking Finance Companies and Notified Entities Regulations, 2008

The Non-Banking Finance Companies Rules, 2003

The Offences in Respect of Banks (Special Courts) Ordinance, 1984

The Office of Wafaqi Mohtasib (Ombudsman) Order, 1983

The Pakistan Environment Protection Act, 1997

The Punjab Consumer Protection Act, 2005

The Punjab Rented Premises Act, 2009

The Punjab Service Tribunals Act, 1974

The Securities and Exchange Commission of Pakistan Act, 1997

The Securities and Exchange Ordinance, 1969

The Services Tribunals Act, 1973

The West Pakistan Civil Court Ordinance, 1962
xviii


The West Pakistan Family Courts Act, 1964

The West Pakistan Land Revenue Act, 1967

SRO 589(I)/2004, dated 5 July 2004

SRO 1261(I)/2008, dated 2 December 2008

United Kingdom

The Companies Act, 1985

The Companies Act, 2006

The Financial Aspects of Corporate Governance: The Cadbury Code, 1992

The Insolvency Act, 1986

The Listing Rules of Financial Conduct Authority

The Takeover Code of the United Kingdom

The United Kingdom Code of Corporate Governance

The United Kingdom Stewardship Code, 2010

The United Kingdom Stewardship Code, 2012

Other Jurisdictions

The Companies Act, 1956 (India)

The Companies Bill, 2012(India)

The Irani Report, 2005 (India)

The Organisation for Economic Co-operation and Development (OECD) Principles of
Corporate Governance

The Companies Act, 2005 (Japan)

xix

Cases

Pakistan

Associated Biscuits International Ltd v English Biscuits Manufacturers Pvt Ltd, 2003 CLD
815, Sindh High Court (Pakistan)

Dewan Salman Fibre Ltd v Dhan Fibres Ltd 2001 PLD Lahore 230

Hassan Al-Adawi v M/s Hama International Pvt Ltd, 2009 CLD 1043

Iqbal Alam and Another v Messrs Plasticrafters Pvt Ltd and 4 Others, 1991 CLC 589

Israrul haq v Al-Tahir Industries Pvt Ltd, 2002 CLD 325, Lahore High Court

Kohinoor Raiwand Mills Ltd v Kohinoor Gujar Khan Mills 2002 CLD 1314; Pfizer
Laboratories Ltd and others, 2003 CLD 1209

Ladli Prasad Jaiswal v The Karnal Distillery Co. Ltd, PLD 1965 SC 221

Messrs Nangina Films Ltd v Usman Hussain and Others, 1987 CLC 2263

Miss Mahenau Agha v United Liner Agencies of Pakistan Ltd, 1990 PLD, SHC 198

Mst. Sakina Khatoon and Others Vs. S.S. Nazir Ahsan and Others, 2010 CLD 963 SHC

National Bank of Pakistan v Banking Tribunal No.1, 1994 PLD Karachi 358

Pakistan State Oil Company Ltd v Pakistan Oil Pipelines Ltd, 1993 PLD Karachi 322

Pfizer Laboratories Ltd v Parke Davis & Co. Ltd, 2007 CLD 1047, Singh High Court

Re: Kruddson Limited, PLD 1972, Karachi 376

Registrar of Companies v Pakistan Industrial and Commercial Leasing Ltd, 2005 CLD
463, SHC

Rohail Hashmi v Nabeel Hashmi, 2003 CLD 201, LHC

Sardar Khan Niazi v Barex Lahore Ltd, 2005 CLD 1670, LHC

Shaukat Ali v Amin Fabrics Ltd, 2008 CLD 837, SHC

Shaukat Ali v M/s Bawany Textile Mills Ltd, 2009 CLD 497

xx

WAPDA v KAPCO, 2000 PLD 461, Lahore High Court

United Kingdom and Privy Council Cases

Aberdeen Ry Co v Blaikie Brothers [1843-60] All ER Rep 249

Anderson v Hogg (2002) SC 190 (IH)

Boardman v Phipps [1964] 1 WLR 993

Boardman v Phipps [1966] UKHL 2

Bray v ford [1896] AC 44 (HL)

Cook v Deeks [1916] UKPC 10

D’Jan of London [1994] 1 BCLC 561

Daniels v Daniels [1978] Ch 406

Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 (HL)

Exeter City AFC Ltd v Football Conference ltd [2005] 1 BCLC 238

Franbar Holdings Ltd v Patel and Others [2008] EWHC 1534 (Ch)

Frederick Geraint Hawkes v Simone Francesca Cuddy, Micheal Cuddy, Neath Rugby
Limited, Neath-Swansea Ospreys Limited [2009] EWCA Civ 291

Gamlestaden Fastigheter AB v Baltic Partners ltd [2007] UKPC 26

Iesini v Westrip Holding Ltd [2009] EWHC 2526 (Ch)

Industrial Development Consultants v Cooley [1972] 1 WLR 443

Island Export Finance v Umunna [1986] BCLC 460 1986 Ch D

North-West Transportation Co. Ltd v Beatty (1887) L.R. 12 App. Cas. 589 (P.C.)

O’ Neill v Phillips [1999] UKHL 24

Pavlides v Jensen (1956) Ch 565

Re A Company (No. 006834 of 1988) (1989) 5 BCC 218

xxi

Re Bhullar Brothers [2003] EWCA 424

Re Allied Business and Financial Consultants; O’Donnell v Shanahan [2009] EWCA Civ
751

Re Guidezone Ltd [2000] 2 BCLC 321

Re London School of Electronics Ltd (1986) Ch 211

Re Lundie Bros [1965] 1 WLR 1051

Re Smith & Fawcett Ltd [1942] Ch 304

Re Yenidje Tobacco Company (1916) 2 Ch 426

Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134 (HL)

Salomon v Salomon [1897] ACHL 23

Scottish Co-operative Wholesale Society Ltd v Meyer [1959] AC 324 (HL)

Smith v Croft (No 2) [1988] Ch 114

Wishart v Castlecroft Securities Ltd [2009] CSIH 65

Other Jurisdictions

Broz and RFB Cellular Inc. v Cellular Information Systems Inc., 673 A.2d 148
(Del. 1995) (US)

Canadian Aero v O’Malley [1974] SCR 592 (Canada)

Chesapeake Corp. v Shore, 771 A. 2d 293, 327 (Del. Ch. 200) (US)

Dodge v Ford Motor Co., 170 N.W. 668 (Mich. 1919) (US)

Guth v Loft, 5 A.2d 503 (Del. 1939) (US)

In re Digex, Inc. Shareholders Litigation 789 A. 2d 1176 (Del. 2000) (US)

Kung v Kou [2004] HKCU 1453 (Hong Kong)

Re Humes Ltd (1987) 5 ACLC 67 (Australia)

Smith v Van Gorkom 488 A.2d 858 (Del. 1985)
xxii


Zapata Corp. v Maldonado (Del. 1981)430 A.2d 779

xxiii

Abbreviations


ABIL: Associated Biscuits International Limited
AC: Appeal Cases
ACCA: Association of Chartered Certified Accountants
ACLC: Australian Company Law Cases
ADB: Asian Development Bank
ADR: American depository receipt
AEIB: Arab Emirates Investment Bank
AGM: Annual General Meeting
AIM: Alternative Investment Market
All ER: All England Reports
AMC: asset management company
ASIC: Australian Securities and Investment Commission
BCLC: Butterworth Company Law Cases
BESOS: Benazir Employees Stock Option Scheme
BMM: Berle–Means Model
CARD: Consolidated Admissions and Reporting Directives
CDC: Central Depository Company
CEO: chief executive officer
CES: closed end scheme

CFL: Coronet Foods Pvt Limited
Ch: Law Report, Chancery Division
CJP: Chief Justice of Pakistan
CLA: Corporate Law Authority
CLD: Corporate Law Decisions
CLRC: Corporate Law Review Committee
CMDP: Capital Markets Development Programme
CMER: Centre for Management and Economics Research
CSIH: Court of Session Inner House
CSRC: China Securities Regulatory Commission
CVS: Cumulative Voting System
DTR: Disclosure and Transparency Rules
EBM: English Biscuits Manufacturers Limited
EEA: European Economic Area
xxiv

EEC: European Economic Community
EFF: Extended Fund Facility
EMS: entity maximization and sustainability
Etisalat: Emirates Telecommunications Corporation
EU: European Union
EWHC: High Court of England and Wales
EWCA: England and Wales Court of Appeal
FBR: Federal Bureau of Revenue
FCA: Financial Conduct Authority
FMGP: Financial (Nonbank) Markets and Governance Program
FSA: Financial Services Authority
FSC: Federal Shariat Court
FSMA: Financial Services and Market Act
FTSE: Financial Times Stock Exchange

GDP: gross domestic product
GDR: global depository receipt
HKCU: Hong Kong Court of Appeal
HL: House of Lords
IA: The Insolvency Act, 1986
IAS: International Accounting Standard
IASB: International Accounting Standard Board
ICP: Investment Corporation of Pakistan
ICSSS: Islamic Countries Society of Statistical Sciences
IFC: International Finance Corporation
IFI: Islamic Financial Institution
IFSB: Islamic Financial Services Board
IIFA: International Islamic Fiqh academy
IH: Inner House
IMF: International Monetary Fund
IOSCO: The International Organization of Securities Commission
IPO: initial public offering
KAPCO: Kot Addu Power Company
KB: King’s Bench Division
KMI: KSE–Meezan Index
KSE: Karachi Stock Exchange