ISLAMABAD – The Securities and Exchange Commission of Pakistan (SECP) initiated 45 fresh show-cause proceedings against the erring management and companies’ auditors for various violations of the Companies Ordinance, 1984, during the month of August.
These violations relate to failure to comply with legal provisions in respect of filing of interim accounts for listed companies, delay in deposit of provident fund amount, discharge of duties by auditors, incorrect/false statement in the accounts, advances loans to associated companies without the prior approval of the shareholders by listed companies, the appointment of a person engaging in brokerage business as a directors, failure to annex consolidated audited financial statements of group by a listed company at the time of filing its annual audited accounts, and omission of material facts in the financial statements.
During the last month the relevant department appointed inspectors to inspect all the records and books of accounts of three companies and furnished report on material and unusual transactions/occurrences, non-compliances and any evasions relating to the affairs of the company.The department strengthened its focus on the quality of audits wherein one proceeding against auditor was concluded for not discharging their duties in line with applicable provisions.Instances were observed where private companies having paid-up capital of Rs.7.5 million and more had appointed unqualified person as the auditors of their companies.
Furthermore, 20 in process show-cause proceedings against companies, their directors and auditors for violating various provisions of the ordinance, 1984 were concluded.
Orders issued by the department can be viewed on the SECP’s website which pertain to non-aintenance/non-placement of mandatory information on their respective websites, non-appointment of whole time company secretary and approving transactions with associated companies in the absence of a quorum in accordance with applicable provisions of the Ordinance.In addition, 18 companies were warned to ensure compliance with corporate laws in true letter and spirit.During August, the epartment resolved 24 complaints from shareholders of various companies.