During the month of September, the Securities and Exchange Commission of Pakistan (SECP) initiated 22 fresh show-cause proceedings against the erring management and companies' auditors for various violations of the 1984 Ordinance. These violations, among others, comprise failure to comply with legal provisions in respect of filing of interim accounts for listed companies, delay in deposit of provident fund amount, deficient discharge of duties by auditors, incorrect or false statement given in the accounts etc.
The Corporate Supervision Department has decided to adopt direct and targeted approach to identify the non-compliances by the companies thereby infringing upon the rights of the shareholders. During the last month the department appointed inspectors to inspect all the records and books of accounts of one company and advised the inspectors to furnish report on material and unusual transactions, non-compliances and any evasions relating to the affairs of the company.The department has strengthened its focus on the quality of audits wherein one proceeding against auditor of a company was initiated for not discharging the duties in line with applicable provisions and failure to bring out material facts about affairs of companies. Instances were observed where private companies having paid-up capital of Rs 7.5 million and more had appointed unqualified persons as their statutory auditors who lack the knowledge and training required to undertake the audit. During the month, the department penalised an unqualified person appointed as statutory auditor of a private company.
Moreover, 12 in process show-cause proceedings against companies, their directors and auditors for violating various provisions of the Ordinance were concluded. In addition, 8 companies were warned to ensure compliance with corporate laws. The department resolved 10 complaints from shareholders of various companies.-PR