ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) initiated 45 fresh show cause proceedings against the management and auditors of different companies for various violations of the Companies Ordinance, 1984, during the month of August.
These violations were related to the failure to comply with legal provisions with respect to filing of interim accounts for listed companies, which include delay in deposit of provident fund’s amount, discharge of duties by auditors, incorrect and false statement in the accounts, advances loans to associated companies without the prior approval of shareholders by listed companies, appointment of a person engaging in brokerage business as 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 and occurrences, non-compliances and any evasions related to the affairs of the company.
Meanwhile, the department strengthened its focus on the quality of audits where one proceeding against auditor was concluded for not discharging duties in line with applicable provisions. The 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 show-cause proceedings, which are in process against companies, their directors and auditors for violating various provisions of the ordinance, 1984 were concluded. The orders issued by the department can be viewed on the SECP’s website, which pertain to non-maintenance and 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 the applicable provisions of the said ordinance. In addition, 18 companies were warned to ensure compliance with corporate laws in true letter and spirit. During the month of August, the department resolved 24 complaints from shareholders of various companies.
