Securities and Exchange Commission of Pakistan’s vigilance: 67 show cause proceedings started

Islamabad, January 13, 2015 (PPI-OT): The Securities and Exchange Commission of Pakistan (SECP) is vigorously pursuing its vision of enforcing corporate securities’ laws, accountability of holding companies and their auditors to create a compliant corporate culture. Through enforcement actions the SECP has reassured the investors that as an independent and robust regulator, it will provide a level-playing field to investors, and violators will be taken to task.

The Enforcement Department of the SECP has initiated 67 show-cause proceedings due to non-compliance with legal requirements regarding holding of annual general meeting (AGM), investment in associated companies, disclosure of statement of material facts, directors’ powers, auditors’ report, circulation of director’s report, disclosure of directors’ interests, circulation of financial statements, employees’ provident funds, and security deposits. These actions have been taken during last two months of November and December 2014.

The department concluded 39 proceedings against the companies and some chief executives, directors and auditors of the companies during this period. The department has recommended the revision in swap ratio of proposed merger of two companies to the higher courts. The department ensured that the scheme of the arrangement proposed by the companies is not prejudicial to the interest of the minority shareholders.

The Department while facilitating the companies allowed two listed companies to issue right shares within one year of the earlier issue of share capital by way of right while another company was allowed to issue shares by way of otherwise than right. In addition, one company was allowed to issue right shares at a discount.

The department also accorded approvals and relaxation from certain provisions of laws and the rules. These approvals pertain to Companies (Issue of Capital) Rules, 1996, appointment of cost auditors under the Companies (Audit of Cost Accounts) Rules, 1998, filing of consolidated financial statements, printing of computerized national identity card (CNIC) number on dividend warrants, extension in time to register mortgage, transmission of accounts through website, extension in holding of AGM and change in place of holding of AGM.

In addition, 52 investor complaints pertaining to non-issuance of shares, non-verification of transfer deeds and non-payment of dividends were resolved.

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: +92-51-9214005 or +92-51-9214009 (Ext. 378)
Fax: +92-51-9206459
Cell: +92-302-8552254
E-mail: shakil.chaudhary@secp.gov.pk
Website: www.secp.gov.pk