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Protecting shareholders at KSE

Protecting shareholders at KSE

According to newspaper reports, the Securities and Exchange Commission of Pakistan (SECP) has started taking action against the companies which have failed to fulfill legal requirements.The commission has already completed proceedings against chief executives, directors and auditors of various companies for violating the rules during the last two months. The proceedings have also been initiated against the companies for not fulfilling corporate and legal the formalities concerning auditors’ reports, directors’ powers, delayed or non-filling of cost audit reports, investment in associated companies, misstatement of facts, takeover regulations, disclosure of directors’ interests, circulation of financial statements, employees’ provident funds, and security deposits. The SECP found a company involved in extending material concessions to another company without obtaining approvalfrom its shareholders while another company provided a loan ofRs 50 million to its associate company which even failed to record the material information in its financial statements. The other companies proceeded against were involved in various irregularities, including inventory valuation and improper deferment of income tax against the set rules and regulations.
Earlier, the SECP suspendedthe trading facilities of the KASB Securities Limited (KSL)at the Karachi Stock Exchange after the State Bank of Pakistan (SBP) imposed a six-month moratorium on KASB Bank Limited to “upholding the smooth and interrupted operations in the securities market and to avoid a consequential financial crisis.”
The SECP is premier institution of the country which is responsible to keep the confidence of the investors intact and protect the interests of the shareholders in the securities market.
The capacity of a government can be challenged, but not its integrity as every government wants promotion of trade and business activities in the country. A majority of businesscommunity is self-made and honest, but there are some elements who just live for the money and die for the money and have nothing to do with the country, nation and the principles of morality. These kinds of elements are found in every discipline of life with a specific mindset to commit white collar crimes. There is a need to identify such elements within the business community to bring them to book.