The Securities and Exchange Commission of Pakistan (SECP) has declared that companies/startups whose websites are involved in illegal activities such as fractionalization of real estate assets and “selling those fractions to [the] public at large” through bogus investment schemes are violating the law.
In a formal notification, SECP has mentioned the following listed companies it has found involved in illegal real estate schemes.
| Name of Company | Platform | Website Address |
| Xstate Technologies (Private) Limited Company | Xstate Beta | https://www.xstate.com |
| Beacon Marketing (Private) Limited | Beacon crowd | https://beaconcrowd.com |
| International Hospitality Investment Group (Private) Limited | IHIG fractions | https://ihigfractions.com |
| Dao Proptech (Private) Limited | DAO PROPTECH | https://daoproptech.com |
| Neo Cassa (Private) Limited | Neo CASSA | http://www.neocassa.com |
According to SECP, none of these platforms have the required approvals needed to perform such functions under the regulatory sandbox regime of the Commission, and hence, they are unlawful.
Nobody can sell securities to the public without its prior clearance, according to Section 87(2) of the Securities Act, 2015. Unlawful activity is a reason for such corporations being wound up under Section 301 of the Companies Act, 2017.
While SECP has adopted a legal course of action against these firms for engaging in unauthorized business activities, it is deemed necessary to warn the public of the possibility of companies misusing their registration status to deceive consumers. In the public’s best interests, SECP has encouraged the general public to avoid spending their hard-earned money in any unlawful schemes.
The matter of fact is that these companies are doing it without approvals. SECP has authorized two companies under sandbox to fractionalize real estate.