Appellate bench upholds SECP order against teleco

ISLAMABAD: A two-member appellate bench of the Securities and Exchange Commission of Pakistan (SECP) has upheld an SECP order that fined a telecom company Rs1.5 million and directed it to stop payment of the questioned dividend immediately and recover and deposit amount of dividend paid earlier.

The two-member bench, comprising Aamir Khan, Chairman SECP/Commissioner Company Law Division; and Farrukh H. Sabzwari, Commissioner AML, issued the order.

The bench order guides/clarifies telecom companies in a number of issues including payment of dividend falling within the domain of the commission.

The bench referred to the law that Companies Act, 2017 prohibits declaration or payment of dividend from the sale or disposal of immovable property or assets of a capital nature.

The income from sale or disposal of capital assets of the company may not be distributed among the shareholders, except through winding up of the company. If the company has disposed of immovable assets, then proceeds for such transfer or sale should have not been used except to promote the company’s objectives and its core business, SECP Bench declared.

The Director/Head of Department (CCD) SECP had imposed a fine of Rs500,000 on the company and Rs1,000,000 on the CEO.