Lahore: The Pakistan Engineering Company Ltd. (PECO) has released its financial results for the year ended June 30, 2019, revealing significant losses and corporate governance challenges. The announcement, made by the company's Directors during a meeting held on January 20, 2025, through Zoom Workplace, highlighted multiple issues faced by the company over the past several years.
According to the financial statements, the company reported a loss after taxation of PKR 466.96 million for the year ended June 30, 2019, compared to a loss of PKR 69.96 million in the previous year. The company's sales plummeted from PKR 1.42 billion in 2018 to PKR 249.64 million in 2019, reflecting a severe downturn in operations. The gross loss for 2019 was PKR 238.00 million, a stark contrast to the gross profit of PKR 25.04 million recorded in 2018.
The Directors announced that there would be no cash dividends, bonus shares, or other entitlements for shareholders, with the rights shares to be announced separately. The external auditors, Messrs. Maqbool Haroon Ahmad & Co. Chartered Accountants, refrained from expressing an opinion on the financial statements due to insufficient records from previous years.
A significant contributor to PECO's financial woes was the unlawful control of the company by the ex-Managing Director, Mr. Mairaj Anees Ariff, from October 2018 to October 2022. During his tenure, essential corporate activities were suspended, including the preparation and auditing of financial statements and the convening of Annual General Meetings (AGMs). The Board of Directors, along with key company officials, were barred from executing their roles, leading to severe consequences.
According to information available from the Pakistan Stock Exchange (PSX), these challenges resulted in PECO's placement in the Non-Compliant Segment and multiple show-cause notices from the Securities and Exchange Commission of Pakistan (SECP). Suppliers filed winding-up petitions, and the National Bank of Pakistan initiated legal action for non-payment.
An SECP investigation, requested by a significant shareholder and Board member, uncovered violations by Mr. Ariff, including fund mismanagement and statutory non-compliance. His removal in September 2022 by Prime Minister Mr. Shahbaz Sharif paved the way for the Board and key management personnel to restore compliance and stabilize the company's operations.
The financial statements for FY 2019 to FY 2023, prepared with diligence under challenging circumstances, reveal cumulative losses exceeding PKR 1.20 billion. Efforts are ongoing to address the aftermath of Mr. Ariff's tenure and ensure compliance with corporate laws and regulations.
The Annual General Meeting of PECO is scheduled for February 17, 2025, at Hotel Four Points by Sheraton, Lahore. The Share Transfer Books will be closed from February 10 to February 17, 2025, and the Annual Report for the year ended June 30, 2019, will be shared at least 21 days before the AGM.
The management remains committed to resolving these issues and steering PECO towards a more stable and compliant future.