ISLAMABAD, Aug 3: More than 55 per cent of the 43,271 unlisted companies registered with the Registrars of Companies are untraceable, according to the latest statistics available from the Securities and Exchange Commission.

In fact, these were the companies from which the SEC drew only blank when it launched two schemes earlier this year for the companies that were irregular in filing of their periodical returns to regularize themselves or opt for Easy Exit Scheme (EES) announced earlier this year.

These schemes, explained Mr Zafar ul Haq Hejazi, Commissioner (Company Law), were conceived after the discovery by the SEC staff that the number of unlisted companies that were not filing any returns for quite a long time was a mind-boggling 26,877 - that is, over 62 per cent of the total number of unlisted companies. Thus the proportion of companies that were filing returns and were within the regulatory mode was less than 38 per cent.

To provide an opportunity to unlisted public and private limited companies to regularize their defaults in filing statutory returns under the Companies Ordinance, 1984, SEC directed them to avail an amnesty by paying some penalties in addition to normal fee in respect of the defaults in filing of returns committed up to the year 2000.

A total of 4,861 companies had got themselves regularized in response to the scheme by June 30, 2002 — the cut-off date — and filed their returns as required under the company law, thus raising the number of regular companies to 19,861.

These included 2,180 companies registered in Karachi, 1,617 in Lahore, 486 in Islamabad, 147 in Multan, 202 in Faisalabad, 185 in Peshawar, 34 in Quetta and 10 in Sukkur.

In order to trace the companies, he said, the SEC posted 60,000 letters to the chief executives and directors of the companies as well as the auditors. For in many cases, the letters were returned undelivered because the companies had changed address or perhaps simply gone out of existence.

The Commission, he said in reply to a question, had not given up its efforts to trace the companies who have yet to respond to its notices. With the immense data now at its service, the SEC was optimistic about finding most of them, he added.

EES: Meant to facilitate dormant companies desirous to get their names struck off the register of companies, the EES is likely to result in deregistration of 2,860 companies after the entire process as required under the company law is completed.

Only those companies could qualify for this scheme who had neither any business nor any assets/liabilities. Applications in this connection had to be supported with the board resolution or a resolution of the shareholders as well as a declaration duly verified by an affidavit. Such entities were also required to furnish a certificate from the company’s auditors.

After these applications were found in order, the Commission notified their names to give the general public an opportunity to file their objections, if any. So far, it has accepted 2365 applications.

With regard to the remaining 495 applications, the Commission has some reservations because of defective documentation.

In many cases, the auditors’ certificates were not categorical in endorsing the claims of the companies. Necessary queries have been addressed to the auditors etc. for ascertaining the facts.

It is expected that in case no objections are received all the cases already published in official gazette would be finalized by August 15.

In such a case, the names of companies to be deregistered under EES would be published again in official gazette, Mr. Hejazi stated.