SECP issues show-cause notices to 41 SOEs over legal violations

The Securities and Exchange Commission of Pakistan (SECP) has issued show cause notices to 41 state-owned enterprises (SOEs) for failing to submit their annual audited accounts and annual returns. Hearings for the non-compliant entities have been scheduled.

The action is part of SECP’s ongoing efforts to improve transparency, strengthen corporate governance and support the government’s reform agenda aimed at enhancing accountability in the SOE sector, read a statement on Tuesday.

According to the statement, the SECP found that 33 SOEs have not filed their annual audited accounts, while 26 companies have failed to submit their annual returns. In addition, seven companies have not held their Annual General Meetings. In total, 66 show because notices have been issued to 41 companies.

Following due process of law, the commission will conclude the proceedings and issue penalty orders after adjudication. The names of the non-compliant SOEs will be published on the Commission’s website. Copies of the orders will also be shared with the relevant Principal Accounting Officers and the Director General of the Central Monitoring Unit.

Separately, the State Life Insurance Corporation has not submitted its audited financial statements for the year ended December 31, 2024. The SECP has written to the Chief Executive Officer of the corporation, directing immediate submission of the accounts. The Commission has warned that regulatory action will follow if the requirement is not met.

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The review also identified governance gaps in board composition. 48 SOEs currently have no female representation on their boards despite SECP regulations requiring the presence of women directors. SECP is writing to the Principal Accounting Officers of the relevant ministries to raise the matter with the board nomination committees to ensure the appointment of female directors.

In addition, four SOEs are operating without appointed Chief Executive Officers. The SECP has advised the concerned entities to fill these positions at the earliest. Copies of the communication are also being shared with the Principal Accounting Officers and the Central Monitoring Unit.

To strengthen oversight, the SECP has developed a comprehensive enforcement plan to monitor the financial reporting and governance practices of SOEs. The commission is also establishing a dedicated wing at its head office to oversee compliance and monitoring of state-owned enterprises.

List of companies failing to comply with company laws:

1.             Postal Life Insurance Company Limited
2.             Pak Libya Holding Company (Private) Limited
3.             Energy Conservation Fund
4.             Devolution Trust for Community Empowerment
5.             Federal Liver Transplant Endowment Fund
6.             Pakistan Gems and Jewellery Development Company
7.             Karachi Garment City Company
8.             WAPDA Endowment Fund for Sports
9.             Fisheries Development Board
10.           National Disaster Risk Management Fund
11.           PHA Foundation
12.           Federal Government Employees Housing Foundation
13.           Overseas Pakistanis Foundation
14.           Pakistan Steel Mills Corporation (Private) Limited
15.           Peoples Steel Mills Limited
16.           Karachi Urban Transport Corporation Limited
17.           Pakistan Textile City Limited
18.           Sukkur Electric Power Company Limited
19.           GENCO Holding Company Limited
20.           Overseas Employment Corporation (Private) Limited
21.           Pakistan Mineral Development Corporation (Private) Limited
22.           Pakistan Railway Advisory & Consultancy Services Limited
23.           Pakistan Revenue Automation (Private) Limited
24.           Pakistan Television Corporation Limited
25.           Pakistan Tourism Development Corporation Limited
26.           Printing Corporation of Pakistan (Private) Limited
27.           Railway Constructions Pakistan Limited
28.           State Engineering Corporation (Private) Limited
29.           Telephone Industries of Pakistan (Private) Limited
30.           Utility Stores Corporation of Pakistan (Private) Limited
31.           Tribal Areas Electric Supply Company Limited
32.           Lakhra Power Generation Company Limited
33.           Hyderabad Electric Supply Company Limited
34.           Quetta Electric Supply Company Limited
35.           National Grid Company of Pakistan Limited (NTDC)
36.           Jamshoro Power Company Limited
37.           Indigenous Research & Development Agency (Private) Limited (STEDec Technology Commercialization Corporation of Pakistan)
38.           Gujranwala Electric Power Company Limited
39.           National Engineering Services Pakistan (Private) Limited
40.           Saindak Metals Limited
41.           Power Planning & Monitoring Company (Private) Limited (formerly Pakistan Electric Power Company)