SECP warns public against illegal deposit taking

June 10, 2021: The Securities and Exchange Commission of Pakistan (SECP) has clarified that mere registration of a company with SECP does not authorize it to seek deposits from the general public.

Deposit taking by companies other than banking companies is illegal in terms of section 84 of the Companies Act 2017. Furthermore, financial services including car financing, leasing, acceptance of deposits, house financing etc. can only be offered by specialized companies holding valid license and regulatory approvals. General public is advised in their own interest to be careful, not to deal and invest in illegal schemes offered by companies involved in any illegal deposit taking, unauthorized investment or Multilevel Marketing (MLM).

The SECP while exercising its regulatory powers to curb illegal deposit taking in the country has taken stern actions against Shaukat Marwat Group comprising of the following companies found involved in illegal deposit taking:

• Shaukat Marwat Group of Companies (Private) Limited
• Shaukat Marwat Estates and Builders (Private) Limited
• Shaukat Marwat Transports (Private) Limited
• Shaukat Marwat Imports/Exports (Private) Limited
• Shaukat Marwat Restaurants (Private) Limited
• Shaukat Marwat Hotels (Private) Limited

SECP has observed that the aforementioned companies are using their registration with SECP and FBR to win public confidence and are soliciting financing through unauthorized investment schemes through Facebook groups and posts on social media.

SECP has issued a direction under section 474 of the Companies Act, 2017 to the aforementioned Companies to refrain from soliciting deposits and refund the amount, if any, collected from the general public; It has initiated penal action under section 84(2)(b) of the Companies Act, 2017 against the said companies for invitation of deposits from the public and; disqualification of directors/CEO for illegal deposit taking under section 172 and section 189 of the Companies ACT, 2017.

SECP has also approached the relevant regulatory authority and the relevant law enforcement agencies to take appropriate action against the aforementioned companies.

The SECP has made public a list of companies, involved in similar un-authorized business activities including illegally collecting deposits from investors by making false promises of exceptionally tantalizing returns. The list of such companies is posted on the SECP official website and can be viewed at the following link: https://www.secp.gov.pk/document/list-of-companies-indulged-in-unauthorized-activities/?wpdmdl=41058&refresh=5ff2b4f5a82801609741557

Complaints or evidences against companies involved in unauthorized activities and illegal deposit taking can be sent at email ID scams@secp.gov.pk.

Press Release