Securities and Exchange Commission of Pakistan initiates 56 show-cause proceedings

Islamabad, November 19, 2013 (PPI-OT): The Enforcement Department of the SECP continues to fulfil its statutory objectives of facilitating regulation and enforcement of companies. In the last two months (September-October), it initiated 56 show-cause proceedings primarily related to the takeover statute, auditors’ reports, powers of directors, holding annual general meetings, investment in associated companies, circulation of financial statements, treatment of surplus on revaluation of fixed assets and security deposits.

During the period under review, the department concluded 62 proceedings against chief executives, directors and auditors of companies. Furthermore, inspection into the affairs of one company was also initiated by the department.

In order to facilitate further issue of capital, a company was allowed to issue shares by way of otherwise than right. Another request for redemption of preference shares was also approved. The department, along with the Sharia Advisory Board of SECP, also reviewed the structure proposed by a company for the issuance of Sharia-compliant participation term certificates. Based on feedback from the SECP, the said structure is under revision by the company.

The department ensures to promptly address grievances and protect the interests of the shareholders. In this regard, 34 complaints pertaining to non-issuance of shares, non- verification of transfer deeds and non-payment of dividends were resolved.

Moreover, four companies were granted exemptions from the statutory duty of filing of consolidated financial statements while four companies were allowed to change the place of its annual general meeting (AGM). And 19 companies were granted extension to hold their AGMs. An application for registration as a group was also approved and in a public limited company was allowed to extend loan facility to its director.

Keeping in view the practical difficulties faced by companies, an exemption from the mandatory requirement of printing computerized national identity card (CNIC) number on the dividend warrants was granted to 25 companies. In addition, 10 companies were given approval to appoint their cost auditors under the 1998 Companies (Audit of Cost Accounts) Rules.

For more information, contact:
Shakil Ahmad Chaudhary
Head, Internal and External Communication
Securities and Exchange Commission of Pakistan (SECP)
NIC Building, 63 Jinnah Avenue, Islamabad
Tel: +9251 921 4005 or 921 4009 (Ext. 378)
Fax: +9251 920 6459
Cell: +92302 855 2254
E-mail: shakil.chaudhary@secp.gov.pk