ISLAMABAD
\nAn inspection and subsequent actions including initiation of investigation proceedings by the Securities and Exchange Commission of Pakistan (SECP) into Unity Foods Limited has led to the registration of a criminal case by the Federal Investigation Agency (FIA) over alleged misuse of shareholders\u2019 and company funds, falsification of accounts and other serious financial irregularities.
\nUnity Foods is a public listed company on the Pakistan Stock Exchange (PSX) and has raised funds from public shareholders. The case assumes particular significance from an investor-protection perspective as the alleged irregularities include the possible diversion of funds specifically raised from shareholders for identified business purposes.
\nAccording to the SECP reference, Unity Foods raised Rs3.75 billion through a rights issue in 2019 for expansion and diversification, including acquisition of assets, additions to its refinery at Port Qasim and establishment of an oil terminal. SECP\u2019s examination found that approximately Rs2.87 billion of these proceeds were allegedly diverted from their stated purposes as the Company failed to provide evidence of utilization of the same.
\nThe SECP probe also identified several other transactions warranting further investigation.
\nThese included alleged payments of Rs5.318 billion from company funds to the former CEO\u2019s mother under the guise of loans\u2019 receipts and repayments, for which appropriate banking instruments and board approvals were not produced. Another Rs2.6 billion was allegedly advanced through a subsidiary to two undisclosed parties, besides other related-party exposures and transactions.
\nThe investigation also raised serious questions about the disposal of company\u2019s subsidiaries and the alleged use of Unity Foods\u2019 funds, inventory and other resources for the benefit of connected entities of the accused. The FIA will investigate the beneficiaries, movement of funds and the role of directors, officers and other persons involved in these transactions.
\nA major part of the case concerns the reliability of the company\u2019s financial reporting. Material referred by SECP indicated an alleged Rs44.7 billion difference between the company\u2019s published accounts and its internal SAP records. The case also involves an alleged Rs5.2 billion discrepancy between inventory recorded in SAP and physical stock, around Rs5 billion in aged receivables without corresponding evidence of delivery of goods, and other accounting inconsistencies.
\nSuch discrepancies are particularly significant for a listed company because shareholders, potential investors and lenders rely on published financial statements and corporate disclosures to assess a company\u2019s financial position and make investment decisions.
\nFollowing its inspection, SECP initiated proceedings under the Companies Act, 2017. As some of the matters identified potentially constituted criminal offences falling outside SECP\u2019s regulatory jurisdiction and administered legislation, the Commission referred the case to FIA under Section 41-B of the SECP Act, 1997 for further investigation and action under applicable criminal laws.
\nBased on the SECP reference and material available, FIA\u2019s Corporate Crime Circle Karachi registered an FIR on August 29, 2026, under Sections 406, 420, 477-A, 109 and 34 of the Pakistan Penal Code against former management and other accused persons. FIA is now investigating the criminal liability of the accused as well as the role of other directors, officers, beneficiaries and connected parties.
\nThe case reflects the importance of regulatory oversight of listed companies, particularly where public shareholders\u2019 money is involved. SECP\u2019s intervention is aimed at ensuring that funds raised from investors are used for disclosed purposes, financial statements present a fair picture of a company\u2019s affairs, and those responsible for suspected misuse are held accountable under the law.
\nSECP Chairman Dr. Kabir Ahmed Sidhu said the Commission would continue to take firm regulatory action to protect investors and uphold confidence in Pakistan\u2019s capital market.
\n\u201cProtection of shareholders rights is a fundamental responsibility of SECP. Funds raised from investors must be used for their disclosed purposes, and shareholders have a right to accurate and transparent financial information. SECP will continue to strengthen the oversight of listed companies and take appropriate action wherever shareholders\u2019 interests are put at risk.\u201d
\nThe allegations remain subject to FIA investigation and determination in accordance with law.<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD An inspection and subsequent actions including initiation of investigation proceedings by the Securities and Exchange Commission of Pakistan (SECP) into Unity Foods Limited has led to the registration of a criminal case by the Federal Investigation Agency (FIA) over alleged misuse of shareholders\u2019 and company funds, falsification of accounts and other serious financial irregularities. […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-565025","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n