KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has referred an alleged investment fraud case to the Federal Investigation Agency (FIA) for further investigation and appropriate action under the law, said a statement on Saturday.
Chairman SECP Dr Kabir Ahmed Sidhu said the commission will deal strictly with market abusers, manipulators and entities misusing their regulated status to deceive investors. He said safeguarding investors’ interests is paramount, and that the SECP will pursue those who abused the market or investors’ trust and take all necessary regulatory and enforcement actions to protect investors and preserve market integrity.
The SECP has initiated an investigation under Section 83 of the Futures Market Act, 2016, following complaints from investors alleging unauthorised collection of funds on promises of fixed returns and guaranteed repayment of principal.
The investigation revealed that 35 complainants have lodged claims amounting to Rs446.664 million. A detailed financial trail involving 29 complainants and Rs408.6 million showed that substantial funds were transferred to accounts of the capital management company in question, its then chief executive officer and director, as well as accounts linked with certain employees and associated persons. Significant amounts were also withdrawn in cash.
The investigation found that investors have entered into agreements offering predetermined returns ranging from 3.7 per cent per month to 48 per cent per annum, with post-dated cheques issued as security. Based on the available evidence, the investigation concluded that the company is allegedly operating a Ponzi-type fraudulent investment scheme, involving illegal deposit-taking and offering guaranteed returns beyond the scope of its licensed activities.
The investigation identified potential violations of the Companies Act, 2017, the Futures Market Act, 2016, and the Futures Brokers (Licensing and Operations) Regulations, 2018. Considering the gravity of the findings, the commission approved referral of the matter to the FIA under Section 41B of the SECP Act, 1997, for further investigation and redressal of investors’ grievances in accordance with the law.
SECP also advised the public to exercise caution against unauthorised investment schemes, particularly those offering fixed or guaranteed returns.
