SECP Cracks Down on Non-Compliant State Firms

The Securities and Exchange Commission of Pakistan (SECP) has initiated enforcement proceedings against multiple state-owned enterprises (SOEs) by issuing show-cause notices for non-compliance with statutory reporting and governance obligations.

According to the regulator, a total of 66 show-cause notices have been issued to 41 SOEs for failing to fulfil mandatory corporate requirements. Specifically, 33 entities did not submit their annual audited financial statements, while 26 companies failed to file annual returns. Additionally, seven SOEs did not convene their Annual General Meetings as required under applicable corporate laws.

The SECP stated that these actions form part of its broader regulatory initiative aimed at enhancing transparency, strengthening corporate governance, and supporting the government’s reform agenda to improve accountability within the SOE sector.

Among the entities served notices are Pakistan Steel Mills Corporation (Private) Limited, Pakistan Television Corporation Limited, Pakistan Tourism Development Corporation Ltd., Utility Stores Corporation of Pakistan, National Transmission and Despatch Company, and Karachi Urban Transport Corporation Limited, along with several other public sector organisations operating across diverse sectors.

Following due process, the SECP will proceed with adjudication and may impose penalties on the non-compliant entities upon conclusion of proceedings.

Separately, the State Life Insurance Corporation has failed to submit its audited financial statements for the year ending December 31, 2024. The SECP has formally directed the company’s chief executive to ensure immediate submission, warning that regulatory action will follow in case of continued non-compliance.

The review further identified governance deficiencies, including the absence of female representation on the boards of 48 SOEs, in violation of SECP’s corporate governance requirements mandating women directors. The Commission has communicated this concern to the relevant ministries, urging corrective action through board nomination committees.

Additionally, four SOEs are currently operating without appointed chief executive officers. The SECP has advised the concerned entities to fill these leadership vacancies without delay.

To strengthen regulatory oversight, the SECP has formulated a comprehensive enforcement strategy to monitor financial reporting and governance practices across SOEs. It is also in the process of establishing a dedicated compliance and monitoring wing at its head office to ensure sustained regulatory enforcement.