The Securities and Exchange Commission of Pakistan (SECP) has clarified that the mere registration of a company with it does not authorize the acceptance of deposits from the general public.
The taking of deposits by companies other than banking companies is illegal in terms of Section 84 of the Companies Act, 2017. The financial services including car financing, leasing, acceptance of deposits, and house financing, etc. can only be offered by specialized companies holding valid licenses and regulatory approvals.
The general public is advised in their own interest to be careful, not to deal with, and invest in illegal schemes offered by such companies.
In this regard, the SECP, while exercising its regulatory power to curb the menace of the illegal business practices in the country, has taken stern actions against Lasani Oil Traders (Private) Limited and New Lassani Chicks & Chicken (Private) Limited.
The SECP promptly initiated legal proceedings for the winding up of these companies based on Section 301 read with section 304 of the Companies Act, 2017, and the disqualification of their directors thereof in the terms of Section 172 of the Act.
The commission observed that both the companies had been using their registrations with the SECP and the Federal Board of Revenue (FBR) to win public confidence, and publicizing unauthorized investment schemes via Facebook groups and posts on social media.
In an attempt to block the companies’ access to the general public, the SECP approached the Pakistan Telecommunication Authority (PTA) to block the Facebook/Twitter presence and the cell phone numbers registered in the names of the companies and their directors. The SECP has also referred the case to the concerned law enforcement agency.
It has publicized a list of 50 companies involved in similar unauthorized business activities including the illegal collection of deposits from investors on the basis of false promises of exceptionally tantalizing returns.
The list of such companies is posted on the SECP’s official website and can be viewed here.
Complaints or information against the companies and entities involved in unauthorized deposit-taking can be emailed to [email protected]