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Unity Foods rebuts rumors of SECP’s probe on serious anomalies, intends to take legal action

March 11, 2022 (MLN): Unity Foods Limited (PSX: UNITY) has rebutted the news item published in a certain section of the media regarding the Securities Exchange Commission of Pakistan (SECP)’s investigation against the company over alleged serious anomalies and it intends to take legal action against news outlet and related persons.

“We vehemently deny the allegations that are being insinuated through the subject article. This is nothing but an attempt to initiate a smear campaign against the Company's and its stakeholders' interests,” the company said in a statement issued to PSX.

As per the company, the communiqué refers to the old correspondence between SECP and the company relating to the years 2018, 2019.

The article refers to a show-cause notice that was issued in 2018 and other correspondence that has been duly responded to and the company stands complied with the provision of required information related to the said show-cause notice and other letters.

The article further presents completely misleading information in relation to other financial matters, the company stated.

“Such irresponsible journalism tantamount to serious defamation against Unity Foods Limited,” it added.

For the uninitiated, the article published in the section of the media stated that Unity Foods is facing an investigation from SECP over irregularities and suspicious related party transactions with associated companies.

According to the report, SECP had initiated two inquiries against the company to determine the factual position in relation to the utilization of proceeds of right issue amounting to Rs2.8 billion, acquisition of assets, and suspicious related party transactions with the directors and associated companies. The inquiries were based on SECP’s examination of the company’s financial statement for the year ending June 2016 and June 2017, which revealed that the company acquired Solvent Extraction Plant from Ayesha Solvent Extraction Plant (Pvt) Ltd, an associated company, having common directors at exorbitant consideration. The company failed to explain the outlay of Rs454 million following which Show Cause Notice investigation under section 257 of the Companies Act, 2017 was issued to probe in the matter to confirm the legitimacy of the transaction.

In the article, it was stated that the company is not cooperating with SECP and a copy of the Banking instrument, copies of cheques evidencing the transactions etc have not been provided by the company.

However, the company in response to such allegations said that it remained fully committed to providing all the material information relating to a company on a timely basis and the details of the SECP related show-cause notices were duly released to the investors through a letter addressed to PSX.

The company further added that it reserves the right to take relevant legal action (both civil and criminal) as necessary against the said news outlet and related persons.

Copyright Mettis Link News

Posted on: 2022-03-11T23:09:55+05:00

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