ISLAMABAD, July 25: The Securities and Exchange Commission of Pakistan (SECP) has imposed monetary penalties on the management of Prudential Group Modaraba allegedly for misappropriation of Modaraba funds.

The irregularity, according to an official source, was detected during the course of off-site monitoring and market information that suggested misapplication of public money by the management.

Subsequently, the Registrar Modaraba, appointed an independent chartered accountants’ firm to look into the affairs of the Prudential Group Modaraba in detail.

Confirming the apprehensions of the Registrar, the special audit report revealed gross misappropriation/misapplication of the Modaraba funds through fictitious transactions, grant of Musharaka facility to an associated company and other malpractices.

The Registrar, therefore, carried out a detailed scrutiny of the situation and then issued a show-cause notice to the management of Prudential Modaraba.

Having come to the conclusion that the management had indeed failed to exercise strict vigilance over the business of the Modaraba and caused substantial loss to the Modaraba Fund by ignoring the interests of investors/certificate holders, the Registrar not only penalized the management but also direct it to recover the amount misapplied through fictitious transactions.