SECP to take penal action against defaulter companies

The SECP has started a campaign to either activate the defaulter companies or strike off the defunct companies. – File Photo KARACHI: The securities and exchange commission of Pakistan (SECP) Thursday warned of taking penal action against defaulter companies operating in the country. According to an SECP spokesman, companies were repeatedly advised to benefit from two amnesty schemes, namely, the companies' regularization scheme (CRS) and the Companies Easy Exit Scheme (CEES).  Companies were asked to regularize their defaults through filing of their overdue returns under the CRS, or strike their companies off the register under the CEES. The defaulter companies were also warned that a strict penal action would be initiated in case of non-compliance. However, despite providing sufficient time and extensive awareness campaigns, it has been observed that a number of defaulter or defunct companies still exist on the register of companies. Now the SECP has started a campaign to either activate the defaulter companies or strike off the defunct companies. The defaulter companies will be penalized for violating the provisions of law, whereas action under section 439 of the companies' ordinance, 1984, shall be taken to strike off the defunct companies not carrying on business, or not in operation, from the register of companies. Under this law, the registrar may strike defunct company off the register, if he has a reasonable cause to believe that the company is not carrying on business or is not in operation. The spokesman added, that in this manner, only the compliant companies shall remain on the SECP rolls, which shall benefit all the stakeholders and the corporate sector.