SECP initiates 35 show-cause proceedings

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) initiated 35 show-cause proceedings against companies, their auditors and directors for various alleged violations of provisions of the Companies Ordinance, 1984, in March, a statement said on Friday.

These violations include failure to comply with the legal provisions in respect of holding annual general meetings, filing of interim accounts and delay in deposit of provident fund amount, discharge of duties by auditors, making false statement in the accounts and non-compliance with the SECP’s directives, etc, it said.

The commission intends to ensure that the quality audits are conducted by the statutory auditors. Six proceedings were concluded through orders against the auditors for not discharging their duties in line with the applicable provisions and their failure to bring out material facts about affairs of companies as per Section 255 of the ordinance.

Moreover, new proceedings were also initiated against four auditors. Proceeding against a company for failing to deposit employees’ provident fund amounts as per the requirements under the Companies Ordinance, 1984, was concluded through an order.

The commission also initiated proceedings against two companies for misstatements and omission of material facts in their respective financial statements, while two such proceedings were concluded through an order.  Show-cause proceedings were initiated against three non-operating companies for winding up.

In two instances of misuse of powers by directors and unauthorised investments in associated companies, proceedings under Section 196 and 208 of the ordinance were also initiated, the statement said.

Moreover, nine orders were issued to companies for non-maintenance / non-placement of all mandatory information on their respective websites. Besides, 37 warning letters were issued to companies to ensure meticulous compliance of corporate and allied laws and applicable relevant accounting standards.

During the month under review, the SECP resolved 74 matters with the entire satisfaction to the complainants. Moreover, 40 proceedings were also concluded through orders for various violations of the ordinance.