KARACHI, May 6: The Securities and Exchange Commission of Pakistan (SECP) has taken tough measures to protect the interest of small shareholders and force companies to declare dividends.
A senior SECP official told APP here on Monday that strict monitoring had forced more than 45 per cent of the listed companies to declare dividends in year 2000.
The commission has also imposed penalties on 51 companies which failed to hold their annual general meetings (AGMs) and to circulate their accounts among shareholders within the stipulated period.
The compliance of the quarterly accounts for the period ended December 31, 2001 was more than 80 per cent, he added.
The commission is also sending its representatives to attend AGMs of selected companies as observers. This has not only resulted in orderly holding of meetings but also enhanced the confidence of shareholders, the official added.
Similarly, penalties were also imposed on 41 companies against non-submission or late submission of half-yearly accounts to shareholders.
The SECP has also identified some cases where the accounts did not present a true and fair view of the state of affairs.
The SECP official said that these cases were under examination and action would be taken in the near future against such companies and their directors as provided under the law.
Referring to the action against mis-managed companies, the official pointed out that the commission has initiated proceedings against 79 mis-managed companies and appointed inspectors in 18 companies to investigate the causes of their bad performance or mismanagement.
In the case of eight companies, the inspectors’ reports have been received, which are being examined, he added.
He pointed out that a number of listed companies have misused their funds for unlawful investments in their associated companies, resulting in huge losses to the companies.
The SECP has exercised strict monitoring of the notices of meeting where special business relating to investments in associated companies was to be transacted by the listed companies.
Similarly, the commission has also initiated action against listed companies for violation of the provisions of the Companies Ordinance, 1984 relating to investment in associated companies on the basis of annual accounts.
This action has stopped 13 companies from diverting funds illegally to their associated concerns. Penalties amounting to Rs10 million were imposed, besides directing the companies to bring back huge amounts from associated companies advanced unlawfully and illegally.—APP