SECP puts fraudulent company BIZNAS. Com out of business

Islamabad: The Securities and Exchange Commission of Pakistan has put an end to fraudulent activities of M/s. BizNas.Com Pakistan (Private) Limited.

A timely action by the SECP’s Karachi-based Companies Registration Office (CRO) has put an end to the fraudulent company, saving a large number of prospective investors losing their hard-earned money.

The Sindh High Court has passed an order for compulsory winding up of the company under section 305 of the 1984 Companies Ordinance. The official assignee has been appointed as official liquidator of the company.

The company was registered with the CRO on March 5, 2002. The main objectives of the company were designing and developing computers software packages. The company operated a website, owned by its parent company, through which it provided different IT courses and also made available to its members space for hosting on its website. The business mechanism of the company was based on a Pyramid or Ponzi scheme, in which returns are paid to earlier investors/members, entirely out of the money paid into the scheme by new investors/members.

The company’s activities were objectionable because they were not provided in its Memorandum of Association. Hence the company was doing ultra vires business. Moreover, the company was engaged in activities that were considered to be of a fraudulent nature, offering people incentives only for getting deposits from other investors.

The show-cause notices were issued to the company but the company failed to clarify its position. The CRO initiated winding up proceedings against the company and a case was filed in the Sindh High Court in 2002, which has now ordered compulsory winding up of the company.

43 investor complaints were resolved during the month by SECP

ISLAMABAD, November 11: As part of its enforcement and regulatory function, the Enforcement Department of the Securities and Exchange Commission of Pakistan passed 34 orders, fining defaulting companies besides issuance of 37 show-cause notices in October, whereas proceedings against five companies were closed with warnings.

The department imposed an aggregate penalty of Rs9.399 million on listed and unlisted companies in October for non-compliance of various provisions of the 1984 Companies Ordinance. The department also resolved 43 investors’ complaints during the month.

Statement by an IMF Staff Mission on Pakistan

An International Monetary Fund (IMF) staff mission, led by Adnan Mazarei, met with the Pakistani authorities in Islamabad to continue discussions on the fifth review under Pakistan’s Stand-By Arrangement (SBA). Mr. Mazarei made the following statement at the conclusion of the mission today:

“Over the past few days, an IMF staff mission and the Pakistani authorities had constructive discussions which focused on assessing the impact of the floods on Pakistan’s economy, adjusting economic policies to respond effectively to the needs created by the floods, and on the outlook for the rest of the financial year 2010/11.1

“Progress has been made regarding the measures to be implemented in the context of the authorities’ economic stabilization and reform agenda, while protecting the poor. Specifically, we have reached broad agreement on the macroeconomic framework and a revised 2010/11 budget deficit target to help flood victims, and rein in inflation, which hurts the poor most. The authorities consider that the reformed general sales tax is essential to raise revenue to finance relief for flood victims, poverty reduction, and infrastructure reconstruction. Tax reform is also needed to make the tax system more equitable. The authorities recognize the critical importance of energy sector reform. They have initiated reforms aimed at reducing load shedding, which is severely hurting economic activity; curtailing energy subsidies in order to free up budget resources for spending in priority areas; and resolving the issue of circular debt.

“The IMF remains committed to the ongoing dialogue with the Pakistani authorities, and discussions will continue including around the Pakistan Development Forum to support Pakistan’s efforts to strengthen macroeconomic stability and growth and completing the fifth SBA review.”