SECP warns companies against illegal levies from the public

ISLAMABAD: The Pakistan Securities Commission (SECP) clarified that simply registering a company with the SECP does not entitle it to solicit deposits from the general public.

The collection of deposits by companies other than banking companies is illegal within the meaning of section 84 of the Companies Act 2017, a press release published here reads.

In addition, financial services, including auto finance, leasing, deposit acceptance as well as real estate finance, can only be offered by specialist companies with valid licenses and regulatory approvals. The general public are advised, in their own best interests, to be careful, not to negotiate and to invest in illegal schemes offered by companies involved in illegal deposits, unauthorized investments or multilevel marketing (MLM).

The SECP, while exercising its regulatory powers to combat illegal deposit collection in the country, has taken severe action against Shaukat Marwat Group comprising the following companies involved in illegal deposit collection: Shaukat Marwat Group of Companies (Private ) Limited, Shaukat Marwat Estates and Builders (Private) Limited, Shaukat Marwat Transports (Private) Limited, Shaukat Marwat Imports / Exports (Private) Limited, Shaukat Marwat Restaurants (Private) Limited and Shaukat Marwat Hotels (Private) Limited.

The SECP observed that the aforementioned companies use their SECP and FBR registration to gain public trust and solicit funding through unauthorized investment programs through Facebook groups and social media posts.

SECP has issued an instruction under section 474 of the Companies Act 2017 to the aforementioned companies to refrain from soliciting deposits and repay the amount, if any, collected from the general public and initiated a criminal action under section 84 (2) (b) of the Companies Act 2017 against such companies for inviting public filings and; disqualification of directors / CEOs for illegal withdrawal of deposits under section 172 and section 189 of Companies ACT, 2017.

The SECP has also contacted the relevant regulatory authority and relevant law enforcement agencies to take appropriate action against the aforementioned companies.

In addition, he made public a list of companies involved in similar unauthorized business activities, including the illegal collection of deposits from investors by making false promises of exceptionally attractive returns. The list of these companies is published on the official SECP website and can be viewed at the following link: ? wpdmdl = 41058 & refresh = 5ff2b4f5a82801609741557

Complaints or evidence against companies involved in unauthorized activity and illegal collection of deposits can be sent to the email ID [email protected]

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