SECP cracks down on non-compliant state-owned companies

Securities and Exchange Commission of Pakistan (SECP) has launched a major regulatory crackdown on state-owned enterprises (SOEs) over widespread violations of company law,  on Tuesday.

The SECP has issued a total of 66 notices, including 41 show-cause notices, targeting public sector companies for serious compliance failures. The move is part of broader government reforms aimed at improving transparency, accountability, and corporate governance across state-owned entities.

Key areas of non-compliance include 33 companies failing to submit audited financial statements and 26 companies not filing annual returns. Additionally, seven companies did not hold their mandatory Annual General Meetings (AGMs), while four state-owned firms are reportedly operating without a Chief Executive Officer (CEO). Notably, the State Life Insurance Corporation has yet to submit its financial statements for the year ending December 2024.

The SECP warned that legal proceedings will follow the show-cause notices, with penalties imposed on companies found in violation. Names of non-compliant companies will be publicly disclosed on the SECP website to promote transparency.

A Nation Obsessed with Criticism—Why SECP Must Be Spared

Corporate governance issues extend beyond procedural filings. The regulator revealed that 48 state-owned companies currently have no female representation on their boards. In response, SECP has directed firms to appoint female directors in accordance with best practices.

To maintain ongoing oversight, SECP has established a dedicated monitoring wing to track compliance in SOEs and will provide guidance to help companies meet regulatory requirements.

This crackdown represents one of the most significant regulatory actions in recent years, signaling the government’s commitment to enforcing discipline and improving the performance of Pakistan’s state-owned corporate sector.