As part of its mandate to monitor listed and unlisted companies to safeguard investor interest, the Enforcement Department of the Securities and Exchange Commission of Pakistan (SECP) has initiated one hundred and twenty two (122) show-cause proceedings against chief executives, directors, and auditors of listed and unlisted companies, that failed to comply with the applicable provisions of the laws.
Enforcement actions for breaches of statutory requirements related to: issuance of auditors' reports, take-over regulations, holding of annual general meeting, inter-corporate financing, issuance of capital, misstatement of facts, employees' provident funds, consolidation of financial statements, circulation of financial statements, disclosure of directors' interests, and cost audit rules.
Penal proceedings against directors of listed company concluded on account of material misstatements whereby the directors siphoned off the tax refunds disguising them as proceeds from the false sale of its subsidiary. In addition to the proceedings noted above, the Department has concluded seventy nine (79) proceedings against directors and auditors of companies either by penalizing and/or by warning the identified defaulters. In addition, the Department has also initiated inspections of the affairs of four companies while an investigation has been initiated into the matters of a private limited company.
The Department addressing the grievances of investors successfully resolved nineteen complaints. These complaints were mainly pertaining to non-issuance of shares, non-verification of transfer deeds, and non-payment of dividends. Four companies have been directed to hold their overdue annual general meetings within a specified time. To facilitate companies in preparation of their consolidated financial statements, six companies have been granted exemption from the requirements of consolidation of their annual financial statements.
One company has been accorded approval to appoint its cost auditors under the Companies (Audit of Cost Accounts) Rules, 1998. In addition, three companies have been allowed to place their quarterly accounts on their respective websites, while one company has been allowed to change its websites address. One company has been allowed to extend loan facility to its chief executive. Extension in time has been granted to a company for making public announcement of "offer to shareholders for sale of their shares"; this is in relation to its intended acquisition of another company.-PR