ISLAMABAD, Dec 24: The Securities and Exchange Commission of Pakistan (SECP) has cancelled the licence of two leasing companies for their inability to raise paid-up capital to Rs200 million as required under the law.

An SECP announcement said here on Monday that it has decided to “cancel the licence to undertake leasing business of two leasing companies, namely Asian Leasing Corporation (ALC) and English Leasing Limited (ELL) owing to the violation of rule 7(3) of the Leasing Companies (Establishment & Regulation) Rules 2000.”

Under the said rule, leasing companies that were granted licence to undertake leasing business before the commencement of Leasing Companies (Establishment & Regulation) Rules 2000, should raise their respective paid-up capital to Rs200 million by June 30, 2001.

These two companies were given adequate time to come up with viable, practicable and time-bound plants to meet the regulatory requirement, but they failed.

Subsequently, the companies were issued show cause notice and then got heard in person to explain their position. However, the respective managements of the two companies failed to come up with concrete and viable proposals, said the announcement.

“SECP, in exercise of the powers conferred by Rule 20(2) of the Leasing Companies (Establishment & Regulation) Rules, 2000 has decided to cancel the licences of ALC and ELL to operate as leasing companies so as to prohibit them from engaging in any further leases.”

SECP said that it hoped the companies would honour their commitments to their creditors and other stakeholders and roll back the leasing facilities already granted over a period of time as determined by the SECP.