ISLAMABAD: The issue of Saudi Pak Leasing Company Limited (SPLC) has reportedly landed at the desk of the Finance Ministry as actions suggested by the SECP have not been implemented, well informed sources told Business Recorder.
Saudi Pak Leasing Company Limited (formerly Standard Chartered Mercantile Leasing Company Limited) was incorporated in January 1991.
In October 1997, Saudi Pak Industrial & Agricultural Investment Company (SAPICO) acquired the entire 30 percent shareholding of Standard Chartered Bank while two private groups acquired 25 percent shareholding. SAPICO was set up by the Government of Pakistan as joint venture with other sovereigns.
The Saudi Arabian government holds 50% equity stake in SAPICO with the other 50% held by Pakistan. Saudi Pak Leasing Company Limited over the last about fifteen years incurred huge losses primarily owing to bad governance if not rampant corruption. As per its Audited Account for 2022, accumulated losses were Rs. 1, 1821 million against ordinary share capital of Rs. 452 million.
Independent Auditors in their Report on the audit of financial statements declined to express opinion on authenticity of Company’s Books of Accounts.
Two private sponsoring groups did not participate in the election of directors held in 2021. Subsequently, SAPICO during September 2022, with a view to safeguarding its own market reputation, asked all three of its nominee directors to resign from the Board of Directors of Saudi Pak Leasing Company Limited.
The sources said adverse developments have led to the situation that Company’s Board of Directors since last over one year comprises of only four independent directors collectively holding 2,500 shares or 0.0005 percent of its 45 million issued ordinary shares.
Finance Division has been informed that the non-representative Board is enjoying huge perks and also making some controversial decisions.
As per Saudi Pak Leasing Company’s annual accounts, the company paid an amount of Rs. 8.2 million to lawyers during year ended June 30, 2023 as against Rs. 1 million paid during same period last year, i.e., an increase of about eight hundred percent.
The sources further stated that taking cognisance of shady affairs of the Company, SECP in its letter of May 12, 2023 cancelled its licence under Section 282J (2) of Companies Act, 2017 thereby depriving it of the status of Non- Banking Finance Company.
Subsequently, SECP, in a letter of July 21, 2023 issued 14 days’ notice prior to filing winding up proceedings of Saudi Pak Leasing Company Limited; however, despite lapse of over two months winding up proceedings have not yet been initiated by SECP.
Finance Ministry has further been apprised that with a view to frustrating SECP line of action, the non-representative Board of Directors now intends to convert status of this company into a ‘Consultancy Firm’ for this purpose and Extraordinary General Meeting has been called on October 17, 2023 for approval.
The sources said, all the affairs of the company are in the knowledge of Finance Ministry which is considering different actions.
Copyright Business Recorder, 2023