SECP starts 68 show cause proceedings
ISLAMABAD, Feb 02 (INP): The Securities and Exchange Commission of Pakistan (SECP) has initiated 68 show cause proceedings against companies, their auditors and directors various alleged violations of provisions of the 1984 Companies Ordinance.
The violations include failure to comply with legal provisions in respect of holding annual general meetings, filing of interim accounts, securities deposits and provident fund, holding directors’ election, eligibility criteria of directors, disclosure of interest by directors, discharge of duties by auditors, preparation of consolidated accounts by the holding companies, prohibition on financing for purchase of own shares by companies and non-compliance with Commission’s directions etc.
The department has adopted a strategy to focus on the quality of audits being performed by the statutory auditors and take to task the auditors whose audit reports are found lacking. Accordingly, during the previous month proceedings against 10 auditors of companies were initiated for not discharging their duties in line with applicable provisions and for their failure to bring out material facts about affairs of companies as per section 260 of the Ordinance. Further proceedings against three companies for apparently failing to deposit or invest employees’ provident fund amounts as per the requirements the Companies Ordinance were instituted. Proceedings were also initiated against a company, which has allegedly made misstatement in the financial statements. Moreover, notices were issued to companies for non-maintenance of website and non-filing or late filing of annual and interim accounts.
The department also issued 60 directions to listed companies advising them to ensure compliance with the requirements of Section 204-A (2) of the Companies Ordinance, and the 2015 Balloters and Transfer Agents Rules by appointing of the share registrar/BTA registered under the BTA Rules. Besides, 59 warning letters were issued to companies to ensure meticulous compliance with corporate and allied laws and applicable relevant accounting standards.