ISLAMABAD: A series of legal disputes involving Unity Foods Limited are set for hearings before courts in Islamabad and Karachi this month, bringing several long-running regulatory and shareholder matters to a potentially decisive stage.
The latest development is a challenge to the Federal Investigation Agency’s (FIA) recent criminal case. The Securities and Exchange Commission of Pakistan’s (SECP) reference and the FIR registered by the FIA’s Corporate Crime Circle in Karachi have been challenged before the Sindh High Court through a contempt application.
The application alleges that the SECP and FIA acted in violation of an earlier court order restraining coercive action. Separately, bail applications filed by four current and former Unity Foods officials are now scheduled to be heard on Sept. 12, after a hearing set for Sept. 9 was postponed because of the judge’s unavailability.
Unity Foods, a Pakistan Stock Exchange-listed edible-oil extraction and refining company, is also facing a shareholder and management dispute. Wilmar Pakistan Holdings owns about 42 per cent, former Unity Foods CEO Farrukh Amin and his family about 24 per cent, and the public roughly 34 per cent. Wilmar has recognised a $150 million provision against its investment amid concerns over Unity Foods’ finances and working capital. The company is operating with an incomplete board and no permanent chief executive.
The main SECP investigation stems from a 2021 inspection that flagged unusual increases in sales, borrowings and rights-issue activity. Trade payables rose from Rs8.8 billion to Rs13 billion. Although the SECP issued a show-cause notice in October 2022, the Islamabad High Court stayed the investigation in November. The matter is scheduled for September 24.
A separate probe followed nine complaints filed by Wilmar nominee director Lie Hong Hwa between February 15 and March 4. After an inspection, the SECP issued a show-cause notice on March 10. Farrukh Amin initially obtained a stay from a Karachi civil court, but the suit was later rejected and the stay vacated. A fresh stay obtained through another suit was recalled, and the Sindh High Court directed the civil court to decide the principal application by September 12.
The SECP is also investigating possible insider trading after a sharp share-price decline and substantial selling by Farrukh Amin’s close relatives before banks liquidated his pledged shares. The probe, stayed by the Sindh High Court, is listed for September. 24.
Another dispute concerns the proposed takeover of Al-Shaheer Corporation by Amin and his family. The SECP has restrained the acquisition over possible takeover-law violations and questions about funding. It has also examined allegations that Unity Foods’ resources were used for Al-Shaheer and related entities. The Sindh High Court has restrained coercive action, with proceedings scheduled for September 30.
The FIA case allegedly involves a Rs44.7 billion discrepancy between published financial information and internal SAP records, suspected misuse of Rs3.75 billion raised through a rights issue, questionable transactions and concerns over bank liens and related-party dealings.
Hearings are scheduled before courts in Islamabad and Karachi and the Islamabad and Sindh high courts between September 10 and September 30. All allegations remain subject to investigation and adjudication.
