The Securities and Exchange Commission of Pakistan (SECP) has initiated a significant enforcement drive against public sector companies as part of a broader government reform agenda to enhance corporate governance, issuing show-cause notices to 41 firms.
The commission confirmed today that a total of 66 notices were sent for various violations of company law. These violations include the failure of 33 companies to submit their annual audited accounts and the non-filing of annual returns by 26 different entities.
Further lapses in corporate responsibilities were identified, with the SECP noting that seven public sector entities failed to hold their mandatory annual general meetings. A concerning leadership vacuum was also highlighted, as four of these public sector companies are currently operating without a Chief Executive Officer.
In a specific disclosure, the regulatory body pointed out that State Life has yet to submit its financial statements for the year ended December 2024.
The SECP has stated that penalties will be imposed on non-compliant entities at the conclusion of legal proceedings initiated through the show-cause notices. Additionally, the names of defaulting public sector companies will be made public by publishing them on the commission’s website.
Addressing a significant governance gap, the regulator revealed that the boards of 48 public sector companies have no female representation. Consequently, the SECP has directed these firms to ensure the appointment of women directors to comply with governance mandates.
To ensure sustained adherence to regulations, a special wing will be established within the SECP to specifically monitor compliance among public sector entities.
“We will provide guidance and support to improve regulatory compliance in public sector companies,” an SECP spokesperson said, reiterating the commission’s commitment to assisting firms in fulfilling their legal duties.