LAHORE, Aug 28: The Lahore High Court ordered on Thursday de-freezing of the accounts of eight foreign exchange companies, which had allegedly been carrying out illegal brokerage in the country.

The orders have been passed on the condition that these companies will immediately make payments to their respective account holders.

Taking up an application of the Securities and Exchange Commission of Pakistan, Justice Naseem Sikandar further directed that an announcement on behalf of these companies — Bulls and Bears, World Business Consultants, United Brokerage Consultants, Forex International Securities, Trade Station Securities, Rauf International, Harvest International and Pindex Limited — should be made through an advertisement in the newspapers that the account holders concerned should contact the respective companies to get back their shares of investment.

The court also issued notices for Sept 12 to the directors of these companies in response to another application of the SECP in which it had demanded that these should be tried under the NAB law for having plundered the public money through fake entities. It was also requested that the directors, whose names had already been placed on the ECL by the court, should be booked on the forgery charges as well for having duped millions of account holders.

SECP counsel Khwaja Saeeduz Zafar argued that by virtue of the issuance of accounts’ freezing orders, the clients of the companies were facing difficulty in withdrawing their amounts.

He requested the court to allow the conditional de-freezing of the accounts to facilitate the account holders.

The counsel also submitted that these companies had originally been incorporated with the prime objective of rendering consultation services to their clients on various international markets of precious metal, stones and stocks for making an optimal investment. However, these started carrying out illegal business while taking deposits under various schemes relating to foreign currency dealing, brokerage and maintenance of trading and portfolio accounts.

“The respondent companies provided these services without obtaining a licence from the SECP as required by the Non-Banking Finance Companies Rules 2003 and Foreign Exchange Regulation Act 1947. They are neither the authorized dealers nor do they have licence to work as moneychangers,” he submitted, adding that these companies had collected Rs4 billion from the account holders so far.

Under the prevalent law, argued Mr Zafar, a company could accept deposits only for financing its own business to the maximum of 25 per cent of its paid capital. In the present case, various accounts were maintained by the respondent companies in violation of this mandatory limit, he added.