Adjudication orders: Officials must incorporate fact about delegation of powers: SECP bench

An appellate bench of the Securities and Exchange Commission of Pakistan (SECP) has directed the SECP officials that the future adjudication orders should incorporate the fact of delegation of powers and functions of the commission to the SECP enforcement officials.
This interpretation of law has been mentioned by a two-member SECP appellate bench while dismissing an appeal No 60 of 2013, filed by a chartered accountant company under section 33 of the Securities and Exchange Commission of Pakistan Act, 1997, against the order dated 11/10/13 (the Impugned Order) passed by the SECP Enforcement Department (Respondent).
According to the order of the Appellate Bench-IV of the SECP, Appellant Counsel (Counsel) argued the appeal, inter alia, on the ground that SECP Head of Department was not authorised to pass the impugned order as the powers invoked by the SECP Enforcement Division were vested with the Commission or the Registrar, therefore he prayed to set aside the impugned order on this ground.
Before the bench proceeds to address the merits of the case, Appellate Bench would like to decide the preliminary objection raised by the Counsel that the SECP Enforcement Department was not authorized to pass the Impugned Order. As per the Statutory Notification No 70612011 published in official Gazette the SECP in exercise of the powers conferred by Section 10 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997) (the Act) read with section 20 (4) (0) thereof, and in suppression of its previous notifications has delegated the Powers and functions of the Commission to the SECP Enforcement Department. Therefore, the SECP Enforcement Department was authorised to pass the Impugned Order. Hence, the objection of the company cannot be acceded. The Counsel further argued that if the SECP Enforcement Department has passed the Impugned Order in exercise of powers of the Commission delegated to him, the same fact should have been mentioned in the Impugned Order.
The Appellate Bench considers this point valid and directs the SECP Enforcement Department to incorporate the fact of delegation of powers in future adjudication orders, if required and applicable. Further, failure of the SECP Enforcement Department to mention in the Impugned Order that the order is being passed in exercise of delegated powers, cannot be considered as a valid ground to set aside the Impugned Order because it is not prejudice to rights of any party, Appellate Bench-IV maintained.
The CA firm has failed to establish its stance that the Impugned Order was passed contrary to the facts and prevailing laws and requirements envisaged in ISA-501. The firm was required to obtain sufficient appropriate audit evidence regarding the stocks, spare and stores in trade, however it failed to perform its responsibilities and violated Sub-section 3 of Section 255 of the Ordinance. The Appellant also provided forged documents to prove its case, therefore same could not be relied. Further, the Accounts audited by the Appellant for four consecutive years incorporated a statement "As taken and verified by the management" which depicts that for a period of four years the Appellant has failed to discharge its duty as auditor. As per the above stated facts the SECP has successfully established the default and violation on the part of firm. In view of the aforesaid, there being no reason to interfere with the Impugned Order dated 11110/13 passed by the SECP Enforcement Department, therefore appeal is dismissed, the appellate bench added.