SECP initiates 54 showcause proceedings

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has initiated 54 show-cause proceedings and concluded 50 current proceedings during October and November against the erring management and companies’ auditors for various violations of the ordinance, a statement issued by the commission said on Thursday.

The department has adopted focused approach towards certain regulatory areas to ensure meticulous compliance, which includes inter-corporate financing, mandatory maintenance of website and submission of quarterly reports.

The SECP, after giving the companies reminders through media to have mandatory company’s website rendering critical information to the current and potential investors, initiated 17 new showcause proceedings against those who failed to do so, it added.

The department concerned also concluded 13 pending proceedings against delinquent companies.

The mandatory website, with the promulgation of the New Companies Ordinance, 2016, would also host the placement of annual and quarterly accounts, in addition to electronic transmission to the SECP and shareholders, which would improve the filing of annual and quarterly accounts, it said.

The statement also said the department concluded 14 proceedings initiated for delay / non-filing of quarterly accounts and penalised companies to send the message that the SECP would not tolerate holding back of critical financial information to the shareholders.

The SECP also took a stern action against those companies that passed on undue benefit to their associated companies by extending huge funds under the garb of abnormal trade debts, without the approval of the shareholders. 

The companies did not recover any markup on such funds, which were mobilised and exposed the company’s liquidity to undue stress, the statement added.