ISLAMABAD, May 11: The Securities and Exchange Commission of Pakistan (SECP) has warned of taking strict action against the companies involved in ultra vires activities. In an official announcement here on Wednesday, the commission has advised all registered companies to abide by the rules and regulations and refrain from undertaking activities beyond their limits as specified in their memorandum of association.
The SECP has recently noticed that certain companies, firms or individuals in the market are inducing the general public to invest their money in multi-level marketing and pyramid schemes, with the promise of high returns in a very short time.
The SECP investigation into the affairs of such companies revealed that most of them were involved in activities not contained in their memorandum of association or doing unauthorized businesses. The SECP has taken appropriate legal actions against a number of such companies.
The announcement said the SECP was committed to continuing efforts to curb unauthorized activities and was closely monitoring the affairs of companies involved in illegal businesses. General public has been advised to be careful while dealing with companies offering unreasonable returns and dealing in multi-level marketing and pyramid schemes, etc.
