Lahore: The Royal Construction Company (Pvt.) Limited has been penalized by the Securities and Exchange Commission of Pakistan (SECP) for failing to file its audited financial statements for the year ended 2023 within the stipulated timeline, as mandated by the Companies Act, 2017. The decision was announced on April 29, 2024, following a series of hearings where the company and its executives repeatedly failed to appear or respond.

The proceedings against the company began with a Show Cause Notice (SCN) issued on February 07, 2024, under Sections 233 and 479 of the Companies Act, 2017. The Act requires companies to file their audited financial statements with the Registrar within thirty days of their annual general meeting for listed companies, and within fifteen days for other companies. Royal Construction Company, a private firm, was found in violation of these requirements, making it liable for a penalty.

Despite multiple opportunities to defend or explain its non-compliance, the company and its chief executive/directors did not attend the scheduled hearings on February 16, February 26, and March 05, 2024. Notices for these hearings were duly sent and confirmed delivered, yet no response or appearance was made by the company representatives.

According to information available from the Pakistan Stock Exchange (PSX), the failure to file these financial statements poses significant concerns about the company's internal controls and management systems. The SECP emphasized the importance of timely and accurate financial reporting to ensure transparency and reliability of a company's financial position and performance.

The decision to penalize the company was made ex-parte, meaning in the absence of the company’s participation, due to its persistent non-appearance and lack of response. The SECP, through its delegation of powers to the Adjudication Officer of Adjudication Department-II, Lahore, imposed a lump-sum penalty of Rs. 10,000 on the company.

This penalty is to be deposited within thirty days into a designated bank account maintained by the SECP at either MCB Bank Limited or UBL Bank Limited. Failure to comply with this penalty payment will result in further recovery proceedings against the Royal Construction Company.

The SECP has noted that this order does not preclude further actions that might be taken against the company if additional issues are discovered or reported. The chief executive of the company is advised to ensure compliance with the order to avoid further penalties.