ISLAMABAD, Sept 19: The Securities and Exchange Commission of Pakistan (SECP) has penalized the chief executive and directors of two companies for illegally inviting deposits from the public in violation of the Companies Ordinance, 1984.

According to the details provided by the SECP here on Friday, the chief executive who simultaneously runs two different companies, namely M/s Indus Valley Rice Mills (Pvt.) Limited and M/s Happy Family Mini Business (Pvt.) Limited had published an advertisement in a newspaper promising lucrative profits to any members of public investing therein.

The memorandum of association of the companies, the SECP observed, did not contain any provision authorizing the companies to invite and accept deposits from general public.

Furthermore, the management also refused to furnish the desired information and produced the documents that were required by the Registrar for his investigation. These violations rendered the companies liable to penal action under the Companies (Invitation and Acceptance of Deposits) Rules, 1987.

The SECP, therefore, imposed a fine of Rs20,000 each on the two companies and Rs5,000 on each director, including the chief executive of the companies. They were directed to deposit the penalties with the SECP within 15 days.

The Company Registration Office, Lahore, has also been directed by the SECP to obtain relevant information from the companies and determine the quantum of deposits so far accepted to take further legal action against the companies and their management.