Lahore: The Securities and Exchange Commission of Pakistan (SECP) has imposed a penalty on M/S Five Star Feeds (Private) Limited for failing to file its audited financial statements for the year ended 2023 within the stipulated timeline, as required under Section 233 of the Companies Act, 2017. The order was announced on March 19, 2024, following proceedings initiated by a Show Cause Notice (SCN) dated February 20, 2024.

The proceedings against Five Star Feeds and its directors, including the chief executive, were initiated under Sections 233 and 479 of the Companies Act, 2017. According to the order, the company did not submit its financial statements to the Registrar in time, thereby contravening the provisions of the Act and making it liable for a penalty at level-i on the standard scale.

The initial hearing, scheduled for February 27, 2024, was attended by Mr. Zafarullah, an authorized representative of the company. He attributed the delay to a restructuring of the finance and accounts department, which led to an inadvertent oversight in meeting the filing deadlines. Despite being given another opportunity to file the requisite documents during the adjudication proceedings, the company failed to comply.

According to information available from the Pakistan Stock Exchange (PSX), the company's failure to adhere to the financial disclosure requirements has raised concerns about its internal control systems and management practices. The SECP emphasized the importance of timely and accurate financial reporting, highlighting that such transparency is crucial for maintaining stakeholders' trust and ensuring the company's financial health.

The SECP's adjudication officer analyzed the case's facts and determined that the company's actions were deliberate. Consequently, a penalty of Rs. 15,000/- was imposed on Five Star Feeds. The company is required to deposit the penalty amount in a designated bank account within thirty days of receiving the order. Failure to do so will result in further recovery proceedings.

The SECP's decision underscores the critical need for companies to adhere to regulatory requirements, ensuring timely and accurate financial disclosures. The case also highlights the responsibility of company directors to exercise due care in fulfilling their fiduciary duties and promoting the company's best interests. The SECP has reiterated its commitment to enforcing compliance with the Companies Act, 2017, to uphold the integrity of the corporate sector in Pakistan.