SECP issues 66 notices to 41 state-owned enterprises over compliance lapses

The Securities and Exchange Commission of Pakistan (SECP) has issued show cause notices to 41 state-owned enterprises (SOEs) for failing to submit their annual audited accounts and annual returns. Hearings for the non-compliant entities have been scheduled.

According to a statement, the action is part of SECP’s ongoing efforts to improve transparency, strengthen corporate governance and support the government’s reform agenda aimed at enhancing accountability in the SOE sector.

The SECP found that 33 SOEs have not filed their annual audited accounts, while 26 companies have failed to submit their annual returns. In addition, seven companies have not held their Annual General Meetings. In total, 66 show because notices have been issued to 41 companies.

The SOEs served notices by the commission include Postal Life Insurance Company Limited, Pak Libya Holding Company (Pvt) Limited, Energy Conservation Fund, Devolution Trust for Community Empowerment, Federal Liver Transplant Endowment Fund, Pakistan Gems and Jewellery Development Company, Karachi Garment City Company, and WAPDA Endowment Fund for Sports.

Other entities named in the list include Fisheries Development Board, National Disaster Risk Management Fund, PHA Foundation, Federal Government Employees Housing Foundation, Overseas Pakistanis Foundation, Pakistan Steel Mills Corporation (Private) Limited, Peoples Steel Mills Limited, Karachi Urban Transport Corporation Limited, Pakistan Textile City Limited, and Sukkur Electric Power Company Limited.

The list further includes GENCO Holding Company Limited, Overseas Employment Corporation (Pvt.) Limited, Pakistan Mineral Development Corporation, Pakistan Railway Advisory and Consultancy Services Limited, Pakistan Revenue Automation (Private) Limited, Pakistan Television Corporation Limited, Pakistan Tourism Development Corporation Ltd., Printing Corporation of Pakistan (Private) Ltd., Railway Constructions Pakistan Limited, and State Engineering Corporation (Private) Limited.

Additional companies include Telephone Industries of Pakistan (Pvt.) Limited, Utility Stores Corporation of Pakistan, Tribal Areas Electric Supply Company Limited, Lakhra Power Generation Company Limited, Hyderabad Electric Supply Company Limited, Quetta Electric Supply Company Limited, National Transmission and Despatch Company, Jamshoro Power Company Limited, Indigenous Research and Development Agency (IRADA) (Private) Limited, Gujranwala Electric Power Company Limited, National Engineering Services Pakistan (Private) Limited, Saindak Metals Limited, and Power Planning & Monitoring Company (Pvt.) Ltd.

Following due process of law, the commission will conclude the proceedings and issue penalty orders after adjudication. 

Separately, the State Life Insurance Corporation has not submitted its audited financial statements for the year ended December 31, 2024. The SECP has written to the Chief Executive Officer of the corporation directing immediate submission of the accounts. The Commission has warned that regulatory action will follow if the requirement is not met.

The review also identified governance gaps in board composition. 48 SOEs currently have no female representation on their boards despite SECP regulations requiring the presence of women directors. The Commission is writing to the Principal Accounting Officers of the relevant ministries to raise the matter with board nomination committees to ensure the appointment of female directors.

In addition, four SOEs are operating without appointed Chief Executive Officers. The SECP has advised the concerned entities to fill these positions at the earliest. 

To strengthen oversight, the SECP has developed a comprehensive enforcement plan to monitor the financial reporting and governance practices of SOEs. The Commission is also establishing a dedicated wing at its head office to oversee compliance and monitoring of state-owned enterprises.