The Securities and Exchange Commission of Pakistan (SECP) has issued show cause notices to 41 state-owned enterprises (SOEs) for failing to submit their annual audited accounts and annual returns. Hearings for the non-compliant entities have been scheduled.
The action is part of SECP’s ongoing efforts to improve transparency, strengthen corporate governance and support the government’s reform agenda aimed at enhancing accountability in the SOE sector, read a statement on Tuesday. According to the statement, the SECP found that 33 SOEs have not filed their annual audited accounts, while 26 companies have failed to submit their annual returns. In addition, seven companies have not held their Annual General Meetings. In total, 66 show because notices have been issued to 41 companies.
Following due process of law, the commission will conclude the proceedings and issue penalty orders after adjudication. The names of the non-compliant SOEs will be published on the Commission’s website. Copies of the orders will also be shared with the relevant Principal Accounting Officers and the Director General of the Central Monitoring Unit.
Separately, the State Life Insurance Corporation has not submitted its audited financial statements for the year ended December 31, 2024. The SECP has written to the Chief Executive Officer of the corporation, directing immediate submission of the accounts. The Commission has warned that regulatory action will follow if the requirement is not met.
The review also identified governance gaps in board composition. 48 SOEs currently have no female representation on their boards despite SECP regulations requiring the presence of women directors. SECP is writing to the Principal Accounting Officers of the relevant ministries to raise the matter with the board nomination committees to ensure the appointment of female directors.
In addition, four SOEs are operating without appointed Chief Executive Officers. The SECP has advised the concerned entities to fill these positions at the earliest. Copies of the communication are also being shared with the Principal Accounting Officers and the Central Monitoring Unit.
To strengthen oversight, the SECP has developed a comprehensive enforcement plan to monitor the financial reporting and governance practices of SOEs. The commission is also establishing a dedicated wing at its head office to oversee compliance and monitoring of state-owned enterprises.