ISLAMABAD, June 16: On a complaint received from Prime Commercial Bank, the Securities and Exchange Commission of Pakistan (SECP), after thorough investigation, has penalized three main representatives of Prime Bank —a UK-based private limited company—and directed them to stop forthwith any business activity of the bank as it is not registered in Pakistan.
According to the complaint, the Prime Bank was involved in unauthorized activities and carrying on business in violation of the Companies Ordinance, 1984, and without obtaining permission of the State Bank and the Board of Investment as required under the relevant law.
After the investigation, the SECP found that the company was marketing certain financial products, namely, Prime e-cards, through various agents/dealers in various cities of Pakistan. The Prime Bank had also engaged dealers in various cities of Pakistan including Rawalpindi, Islamabad, Karachi, Lahore, Multan, Faisalabad, Gujranwala, Gujrat, Haripur, Mirpur, Quetta, Sialkot, Sargodha and Peshawar.
Under the law, the spokesman pointed out, a foreign bank must obtain written consent from the State Bank and approval of the Board of Investment before establishing business in Pakistan. Prime Bank, however, did not fulfil these requirements before engaging in business.
After receiving a complaint from Prime Commercial Bank Limited — a listed Pakistani banking company — the SECP issued a show cause notice to the dealers/agents of the company on March 19, 2003 under Section 451 of the Companies (General Provisions and Forms) Rules, 1985.
The Commission, in its directive issued under Section 472 of the Companies Ordinance, has now called upon the agents/dealers of Prime Bank to stop forthwith any activities on behalf of the said bank, acceptance of deposits in any form and not to indulge in/advertise any investment plan that invites the general public to deposit money with any person, dealer or agent on its behalf. The Prime Bank as well as its representatives have also been directed to make good defaults, if any.
Furthermore, the commission has also directed following three persons to pay Rs18,000 each as fine: 1) Capt. (retd.) Razaq A. Mian, Representative, Prime Bank Ltd. 2) Mr Muhammad Segal, Manager, Prime Bank Ltd. 3) Mr Salah-ud-Din, Manager, Prime Bank Ltd.