Lahore: In a decisive move, the Securities and Exchange Commission of Pakistan (SECP) has imposed a penalty on Mis. Feiya Yarn (Pvt.) Limited for failing to file its audited financial statements for the year ended 2023. The decision, announced on May 27, 2024, follows multiple unsuccessful attempts by the Commission to secure compliance from the company regarding the submission of its mandatory financial documents.
According to information available from the Pakistan Stock Exchange (PSX), Feiya Yarn (Pvt.) Limited was found in violation of Section 233 of the Companies Act, 2017. The Act mandates companies to file their audited financial statements with the Registrar within specified timelines—thirty days for listed companies and fifteen days for others—after adoption at the annual general meeting. The company’s failure to adhere to these regulations has raised concerns regarding its internal management and control systems.
The proceedings against Feiya Yarn began with the issuance of a Show Cause Notice (SCN) on February 20, 2024, which required the company to justify its non-compliance. Despite multiple notices and opportunities for hearings on February 28, 2024, and March 18, 2024, the company and its chief executive did not respond or appear before the Commission. This persistent non-appearance prompted the SECP to make an ex-parte decision.
The SECP's adjudication officer, armed with delegated powers under Notification S.R.O. 1546 (I)/2019, determined that the violation was deliberate, underscoring systemic issues within the company’s governance structure. Consequently, a penalty has been imposed on Feiya Yarn, demanding prompt payment to the designated bank accounts within thirty days. Failure to comply with this order could result in further legal actions against the company.
This case highlights the importance of timely and accurate financial reporting, which not only ensures transparency but also provides stakeholders with a reliable assessment of a company's financial health. The SECP emphasizes that all companies must strictly follow the law in preparing and submitting their financial statements to maintain market integrity and investor confidence.