Islamabad: The Securities and Exchange Commission of Pakistan (SECP) has concluded its adjudication proceedings against the Board of Directors of Citi Pharma Limited, following accusations of non-compliance with key regulatory provisions. The proceedings, initiated on April 26, 2024, scrutinized the company’s failure to adhere to commitments outlined in its prospectus related to the establishment of a hospital project.
Citi Pharma Limited, incorporated on October 8, 2012, and listed on the Pakistan Stock Exchange on July 9, 2021, initially proposed to construct a 50-bed hospital in Lahore’s Gulberg area as part of its public offering. However, the SECP discovered discrepancies in the project plans, including a relocation to DHA Rahbar, Raiwind Road, and an expansion to a 200-bed facility, contrary to the original prospectus.
According to information available from the Pakistan Stock Exchange (PSX), Citi Pharma Limited’s financial disclosures for the year ending June 30, 2022, revealed the change in project site and scale, raising regulatory concerns. The SECP’s investigation highlighted the absence of exceptional circumstances warranting such alterations without prior approval from the company’s shareholders, as required by Regulation 16 of the Public Offering Regulations, 2017.
The company’s board justified the changes by citing limitations at the original site, such as noise, space constraints, and regulatory compliance issues. Despite these explanations, the SECP maintained that the decision to alter the hospital project’s scope and location significantly affected shareholder interests, requiring formal approval which was delayed until October 2024.
The SECP’s adjudication emphasizes the necessity for companies to adhere strictly to their prospectus commitments, particularly when deviations impact the project’s cost and timeline. This regulatory scrutiny underscores the importance of maintaining transparency and compliance in public offerings, ensuring investor protection and confidence in market operations.