Strict action has been taken by the Securities and Exchange Commission of Pakistan (SECP) against two companies engaged in attracting illegal investments from the general public through the use of the relevant authorities’ registrations.
In Thursday’s release, the SECP reported that it had made public a list of 50 companies engaging in similar unauthorized business practices, including illegally collecting investor deposits by making false promises of extremely tantalizing returns.
“The SECP has taken stern action against Lasani Oil Traders (Private) Limited and New Lassani Chicks & Chicken (Private) Limited while exercising its regulatory power to curb the threat of illegal business practices in the country,” the statement read. The SECP has immediately opened legal proceedings for the liquidation of these companies pursuant to section 301, read with section 304 of the Companies Act, 2017, and for the disqualification of their directors pursuant to section 172 of the Act.’
The Commission noted that both companies were using their SECP and FBR registrations to gain public trust and were publishing illegal investment schemes through Facebook groups and social media posts.
The SECP contacted PTA to block Facebook/twitter accounts, mobile phone numbers recorded in the name of companies and their directors in an effort to block companies’ access to the general public. It also made reference to the proper law enforcement agency for the case.
The SECP has clarified that the mere registration of a corporation with the SECP does not allow the general public to accept deposits. Under section 84 of the Act, the taking of deposits by firms other than banking companies is unlawful.
“Only specialized companies holding valid licenses and regulatory approvals may offer financial services, including car financing, leasing, acceptance of deposits, house financing, etc..”
The SECP cautioned the general public to be careful not to deal with and invest in fraudulent schemes proposed by such firms in their own interests.