ISLAMABAD, July 26: Securities and Exchange Commission of Pakistan (SEC) has fined the Chief Executive of Essa Cement Industries Limited under the Companies for lapses related to audit under Audit of Cost Accounts Rules, 1998.

The charge against the said company is that, the Enforcement and Monitoring Division (EMD) of SEC stated here on Friday, it had failed to have cost accounts of the company audited even after having sought approval of the SEC for appointment of cost auditors. It, however, simply did not allow the cost auditors to access its cost accounting records for the year 2000-01.

Further examination of the record revealed that Essa’s compliance with the Cost Audit Rules had been unsatisfactory in the past as well. For example, it had not submitted its cost audit reports for the period from 1998 to 2000.

As the company was unable to provide any justifiable excuse for the default, according to the source, the EMD has imposed a monetary penalty on the chief executive and directors of the company for the violation of sub-rule (1) of rule 3 of the Companies (Audit of Cost Accounts) Rules.

By another order, the EMD has penalized Associated Industries Limited for their alleged failure to furnish explanation on reservations and qualifications made by the cost auditors in the cost audit report for the year ended June 30, 1999. They also did not get their cost accounting record audited for the years 1997-98 and 1998-99.

After the scrutiny of the company’s cost audit report for 1999-2000, it is transpired that the company’s records did not reflect a true and fair view of the cost of production, processing, manufacturing and marketing of vegetable ghee, cooking oil and soap. They were also silent in respect of the information required by the rules in the prescribed manner.

The explanations/arguments offered by the company for these lapses were found devoid of any force, the EMD order further stated.

Essa and Associated Industries were further directed by the SEC to rectify the irregularities by getting the overdue cost accounts audited and to file reports with the commission by the last week of August 2002.