SECP Warns Chemical Manufacturer Over Delayed Filing of Its Financial Statement

The Securities and Exchange Commission has issued a stern warning to the Chief Executive of M/s Pak China Manufacturing (Pvt.) Limited on account of failure to file its audited financial statement for the year ended 2023. According to an order issued by the SECP, this Order shall dispose of the proceedings against MIS. Pak China Manufacturing (Private) Limited and its directors including the chief executive, initiated through a Show Cause Notice (the SCN) dated March 20, 2024, issued under the provisions of Section 233 read with Section 479 of the Companies Act, 2017 (“the Act”). Brief facts of the case are, that “the company” had failed to file its audited financial statement(s) for the year ended 2023 with the “Registrar” within the stipulated timeline, pursuant to Section(s) 233 of “the Act”. Without any prejudice, the company had contravened the aforesaid provisions of “the Act” and rendered the company liable to a penalty of level—i on the standard scale, as provided under Section 233(4) read with Section 479 of “the Act”. Considering the facts of the case, proceedings, arguments heard, and other records presented before the undersigned, the SECP is compelled to infer and decide the case as the company has complied with the mandatory requirements of Section 233 of “the Act”, during the pendency of the adjudication proceedings and the same fact has also been verified by the Registrar, Lahore. Before proceeding with the decision, the SECP would also like to highlight that directors of the company are required to exercise the utmost care in making business decisions in order to fulfill their fiduciary duties. Duty of care requires directors to make a business decision after considering all available information, and requirements of laws/regulations with regard to operations of the company and then act in a judicious manner while promoting the company’s best interest. However, as the company has complied with the requirements of Section 233 of “the Act”, during the adjudication proceedings, therefore, the SECP, while exercising the powers delegated vide S.R.O. 1546 (1)12019 dated December 06, 2019, hereby condone penalty, with a “warning” to “the company” for future adherence to the law, in letter and spirit, to conclude “the SCN” proceedings, SECP added.