PSCs required to publish, circulate and file SOC: SECP bench

An Appellate Bench of the Securities and Exchange Commission of Pakistan (SECP) has ruled that the public sector companies are required to publish, circulate and file statements of compliance (SOC) and review reports from the auditor under Public Sector Companies (Corporate Governance) Rules, 2013. According to an order issued by an Appellate Bench-IV of the SECP, the bench has upheld the order issued by the SECP against the fund.
The impugned order was issued by the SECP under the relevant provisions of the law and was passed on merits. The Appellant (Universal Service Fund) has no case to defend as the default is admitted, the bench said. The SECP Appellate Bench has heard the parties, ie, the appellant and respondents (SECP officials). The fund has accepted the default but stated that it was due to the delay of the auditors that the statement of compliance (SOC) was submitted subsequent to passing of the impugned order.
The SECP Appellate Bench is of the view that the SECP officials had been reasonable in giving the appellant adequate time to submit the SOC, however, there was unreasonable delay in submitting the SOC and any delay on part of the external auditors is not a sufficient reason for contravention of the Rules. The penalty for contravention of the Rules, therefore, was rightly imposed on the fund.
In view of this, the SECP Appellate Bench sees no reason to interfere with the impugned order. The impugned order of the SECP is upheld, it added. The order is passed in the matter of Appeal No 85 of 2016 filed under section 33 of the Securities and Exchange Commission of Pakistan (Commission) Act, 1997 (SECP Act) against the Order (impugned order) dated 06/09/16 passed by respondents (SECP and Commissioner Company Law Division).
The brief facts of the case are that fund (the appellant), being a public sector company, was required to publish, circulate and file statements of compliance (SOC) and review reports from the auditor for the years ended 30/06/14 and 30/06/15 as required under rule 240) & (2) of the Public Sector Companies (Corporate Governance) Rules, 2013 (the Rules) but the appellant failed to do so.
The show cause notice dated 28/04/16 (SCN), issued under rule 25 of the Rules read with section 506(2) of the Companies Ordinance, 1984 (the Ordinance) was issued calling upon the appellant and its directors/officers to explain in writing and also to appear in person or through an authorised representative for hearing on 15/06/16 to clarify the position. In response to the above SCN, the appellant, vide letter dated 11/05/16, submitted the SOC for the year 2014 and further informed that SOC for the year 2015 will be submitted once the review report is received from the external auditors.