Lahore: Rahat Spinning Mills (Pvt.) Limited and its directors, including the chief executive, have been penalized for failing to file audited financial statements for the year ended 2023 in accordance with the Companies Act, 2017. The Securities and Exchange Commission of Pakistan (SECP) has imposed a Rs. 10,000 fine on the company for non-compliance, as announced in an order issued on April 29, 2024.

The proceedings against Rahat Spinning Mills were initiated following the issuance of a Show Cause Notice (SCN) on February 07, 2024. The company failed to submit its audited financial statements to the Registrar within the timeline stipulated under Section 233 of the Companies Act, 2017. Despite multiple opportunities for hearings on February 16, February 26, and March 05, 2024, the company and its directors did not appear nor responded to the SCN.

According to information available from the Pakistan Stock Exchange (PSX), the non-compliance by Rahat Spinning Mills has raised concerns about the company's internal management systems and controls. The SECP emphasized the importance of timely and accurate financial reporting, stating that it is essential for transparency and provides a reliable source of information on a company's financial standing.

The SECP's Adjudication Officer in Lahore was delegated to adjudicate the case under Notification S.R.O. 1546 (1)/2019. Given the company's persistent non-appearance and lack of response, the adjudication was conducted ex-parte, leading to the imposition of the penalty. The order also warned of potential further actions if the penalty is not deposited within thirty days with designated banks, MCB Bank Limited or UBL Bank Limited, on behalf of the SECP.

The SECP stressed that the order does not preclude additional investigations or actions against Rahat Spinning Mills for any further violations. The company is urged to comply with the penalty payment and adhere to the financial disclosure requirements to avoid further repercussions.