FIA Registers Case Over Rs44.7bn Unity Foods Discrepancy

The Federal Investigation Agency (FIA) has registered a criminal case against the former management of Pakistan Stock Exchange-listed Unity Foods Limited over alleged financial irregularities, including a reported Rs44.7 billion discrepancy between the company’s published financial statements and its internal records.

The case was registered by the FIA’s Corporate Crime Circle in Karachi on August 29 following a referral from the Securities and Exchange Commission of Pakistan (SECP) under Section 41-B. The referral came after an SECP investigation uncovered suspected violations involving company funds, financial disclosures and inventory records.

According to the FIR and an SECP statement, Unity Foods had raised Rs3.75 billion from shareholders through a rights issue. Investigators allege that approximately Rs2.87 billion of the proceeds was used for purposes different from those disclosed in the relevant issue documents.

The investigation also found that around Rs5.318 billion in company funds had allegedly been provided as a loan to the mother of the company’s former chief executive officer.

Separately, a Unity Foods subsidiary allegedly advanced Rs2.6 billion to two unidentified individuals or entities in another transaction under investigation.

The SECP inquiry further identified an estimated Rs44.7 billion gap between amounts reported in Unity Foods’ published financial accounts and figures contained in its internal SAP records.

Investigators also pointed to an approximately Rs5.2 billion difference between inventory reflected in the company’s accounting records and its actual physical stock.

Another concern involved old outstanding liabilities worth around Rs5 billion. Investigators reportedly found insufficient evidence demonstrating that goods had actually been supplied against these outstanding amounts.

Following the SECP referral, the FIA has registered the case against former members of Unity Foods’ management and other accused individuals under relevant provisions of the Pakistan Penal Code.

SECP Chairman Kabir Ahmed Sidhu said the regulator would continue working to safeguard investor funds in listed companies and strengthen transparency in corporate financial reporting.

Sidhu emphasised that protecting minority shareholders is a core responsibility of the SECP, adding that money collected from investors must be utilised strictly for the purposes communicated and disclosed to them.