SECP strikes off 3,000 non-performing firms

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has decided to strike off more than 3,000 non-performing companies from its books in a bid to streamline the working of registered companies.

The SECP has served final notices to 2,094 companies registered in Peshawar, 462 in Quetta, 844 in Multan, 26 in Faisalabad and six in Gilgit. The names of 198 companies were struck off by the Companies Registration Office Lahore.

The strike-off action has been initiated under Section 425 of the Companies Act, 2017 against the companies that have been “ineffective” for the last three years. Many companies were set up but the managers later decided not to pursue the operations of or fulfill regulatory requirements, an SECP official said, adding: “At the same time, the SECP continues to forward notices to the managements of such non-performing firms.”

There are around 156,198 registered companies in the country. According to the SECP official, the regulator is in a position to strike off even up to 10,000 companies.

SECP chairman Amir Khan told Dawn there was a need to ease up the wind-up procedures for the companies. “The wind-up procedure has to be easy, but at the same time there has to be protection for investors and minority shareholders,” he said.

The number of company registration has increased significantly in the past three years witnessing a growth of more than 60 per cent, from 93,000 in December 2018. The main reason for the rapid growth in the registration of new companies is the end-to-end digitisaion facility available for company formation.

“Now any company can be established within a day, without any paperwork, and even the registration certificate is delivered online,” Mr Khan said.