of white-collar financial crimes, involving violations of corporate laws, by several units, including three listed companies during 2007.
Sources said on Monday that the FIU has unearthed serious nature of violations like misrepresentation in financial statements, including non-recording of revenues/sales, breach of statutory duties by the directors of listed companies, unlawful appointment of managing agent, insider trading, designing and effecting fraudulent acts, misleading audit reports by statutory and cost auditors, failures of stock brokers to carry out appropriate due diligence and failure of investment bankers to comply with their statutory obligations.
In one ease, the FIU found out that the directors of Ahmed Spinning Mills Limited (ASML) disposed of ASMLs investment in shares of United Sugar Mills Limited (USML) to Clearshore at a price of Rs 16 per share.
Subsequently, the personal holding of ASMLs directors and Clearshores holding in USML were sold off, along with the management control, at a price of Rs 333 per share, thus depriving the ASMLs shareholders of their rightful share of Rs 213.425 million.
The commission imposed an aggregate penalty of Rs 10 million on Clearshore, its directors and directors of ASML for violation of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002.
The commission also restrained Clearshore and the directors of ASML from receiving the balance consideration of the sale, and directed that the amount be held in trust, the report said.
In another case, the FIU investigated complaint against Hala Enterprises Limited for disposing of a piece of land for settling bank liabilities of an associated private limited company. The sale of land, sale proceeds and receivables from associated company were not recorded in the books of the company to conceal the transaction.
Thus the financial statements placed before the shareholders contained mis-statement. The commission, committed to improving governance in the listed companies, has resolved to bring in transparency in the affairs of the listed companies by setting up an “FIU”. Business Recorder, 2008
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