The Securities and Exchange Commission of Pakistan's (SECP) Corporate Supervision Department has concluded adjudication of 48 proceedings against the listed and non-listed companies in December 2015. Subsequently, Orders were issued against their chief executives, directors and auditors for violating certain provisions of the Companies Ordinance 1984 and to impose penalties.
The majority of these proceedings pertain to the failure of companies to hold annual general meetings, non-holding of directors meetings, failure in filing quarterly accounts by the listed companies, disclosing the Directors' interests to the members, complying with legal requirement relating to security deposits and provident fund, non-maintenance of functional websites and non-disclosure of statement of material facts.
The Corporate Supervision Department initiated 13 new proceedings by issuing show-cause notices to listed and unlisted companies. It has also issued four direction notices to companies for ensuring appointment of share registrar within 30 days. Moreover, approval was granted to a listed company for issuance of its share at par and appointed Cost Auditor in the matter of 3 listed companies.
Further an order was issued against the directors of a listed company for misusing their powers by allowing abnormal credit period for recovery of a debt from the son of one of company's director. The director had not disclosed the conflict of interest (the relationship) in company's accounts. The company was also directed to take steps for recovery of all the outstanding amounts, including interest/mark up and furnish auditors' certificate.
In another instance, the chief executive of a listed company was held liable for not making payments to the Company as per liabilities recorded in the books of the Company and non-compliance of Commission's directions. Fine was was imposed on the CEO of listed company.
In a listed company, fine was imposed on the directors for not complying with the Commission's directions to take steps to remove qualifications of auditors on the financial statements. Moreover, an order was issued against a non-listed company for submitting accounts which were purportedly audited, but upon verification those were not found to be audited by the auditor mentioned in the accounts report attached.
The said auditors have also denied having audited those accounts. Penalty on directors of the Company was imposed under section 492 of the Ordinance and they were directed to file the duly audited Accounts with the Registrar.
Directions have been issued to both listed and unlisted companies to maintain their respective websites strictly in accordance with the requirement of the notifications issued by SECP. Moreover, actions against the auditors of companies were concluded through warning and penalty orders. A winding-up order was issued authorising the Registrar to present a petition for winding-up of a listed company.-PR