ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has warned companies of penal action regarding grant of gifts to their shareholders.
In a circular issued by the regulator said granting gifts to shareholders is an offense and companies in default or not complying with the requirements of law shall be liable to be penalized.
The SECP observed that the companies were giving gift/incentives in lieu of gift to shareholders at or in connection to annual general meeting. Moreover, the SECP also received complaints in connection of expectation of shareholders to receive gifts from companies.
The regulator said that provision of gifts/incentives in any form to shareholders at or in connection to general meetings is strictly prohibited under Section 185 of the Companies Act, 2017. “Companies are therefore directed to restrain from giving any gift/incentive in lieu of gift (token/coupons/lunches/takeaway packages) in any form or manner to its shareholders at or in connection to their respective general meetings,” the SECP said. “Likewise, companies must also denounce any demand of any gift/incentives from shareholders,” it added.
