ISLAMABAD: In order to ensure the compliance of prevailing laws and statues by regulatees, the Enforcement Department of the Securities and Exchange Commission of Pakistan (SECP) has taken enforcement action against directors and auditors of 20 listed and unlisted companies.
According to a statement issued by the SECP here Thursday, the SECP monitors the affairs of listed and unlisted companies and their statutory auditors.
During May and June, various regulatory and punitive actions were initiated against directors and auditors of companies with the aim to safeguard interest of stakeholders particularly minority shareholders.
The department ordered investigation and inspection into the affairs of 4 companies. The said investigations were initiated on account of long-term suspension of operations, mismanagement of affairs, non-payment of dividend and non-provision of information to the members of companies.
Proceedings were initiated against auditors of the 20 companies, failing to discharge their duties in accordance with the requirements of the law.
Seventeen cases have been finalized and penalty has been imposed on 15 auditors while warnings have been issued in 2 instances.
In order to protect the rights of minority shareholders, the department identified 8 violations of unauthorized inter-corporate financing and initiated proceedings against the directors of these companies. Directors of 4 companies have been penalized while directors of 2 companies have been strictly warned to ensure compliance.
In addition, directors of 2 companies have been penalized on account of abuse of powers while in 10 instances directors were penalized for misstating facts to shareholders.
The department initiated legal proceedings against companies for depriving shareholders of their right to participate in the affairs of the companies by not holding or delaying annual general meeting of companies.
In this regard, directors of 2 companies were penalized and penalty was imposed where the company failed to disclose material information to shareholders regarding proposed sale of property in the statement of material facts annexed with the notice of annual general meeting.
In order to ensure availability of material information to shareholders enabling them to make informed decisions, permission was granted to a listed company to place their quarterly accounts on company's website. To facilitate operational ability of a company, the SECP granted permission to issue shares otherwise than right at discount to its director against their outstanding loan amounting to Rs343.2 million.
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