ISLAMABAD: The Secu­ri­­ties and Exchange Com­mis­sion of Pakistan (SECP) on Wednesday warned that deposit-taking by companies — other than banks — was illegal under Section 84 of the Companies Act.

The SECP issued a general statement after receiving complaints from investors that “Lasani Oil Traders (Private) Limited” and “New Lassani Chicks & Chicken (Private) Limited” were collecting money for investments.

The regulator said action has been taken against the companies. Legal proceedings were initiated against the winding up of these firms under Section 301 read with Section 304 of the Companies Act, 2017 while disqualification of directors under Section 172 of the Act is also being initiated, the SECP said.

The two companies were using their registration with the SECP and Federal Board of Revenue to win public confidence and publicising unauthorised investment schemes via social media. In an attempt to block the companies’ access to the general public, the SECP also approached the Pakistan Telecom Authority to block Facebook pages, Twitter accounts and cell phone numbers registered in the names of these firms and their directors.

The regulator has also made reference of the case to the Federal Investigation Agency (FIA).

The corporate sector regulator added that all kinds of financial services including car financing, leasing, acceptance of deposits, house finance etc. can only be offered by specialised companies holding valid licence and regulatory approvals.

Published in Dawn, January 21st, 2021