SECP probes discrepancies in SE Fruits IPO

Islamabad: The Securities and Exchange Commission of Pakistan (SECP) has initiated an investigation into SE Fruits and Vegetable Limited's IPO following an anonymous complaint. The probe centers on financial discrepancies found in the company's audit report. The SECP aims to bolster the Audit Oversight Board in light of the discovered issues.

The probe will scrutinize the IPO approval process for any oversights, negligence, or lapses. The inquiry follows an anonymous complaint lodged on September 11, just two days after the SECP approved the company's prospectus based on its audited financials. Preliminary findings revealed discrepancies in reported sales, local sales not reflected in the 2024 income tax return, and a mismatch between reported sales and bank credits.

The complaint questioned the sales figures in the prospectus, which were based on the company's audit report. The SECP requested SE Fruits and Vegetable Ltd., its consultant, and its auditors to submit documents and explain the discrepancies. The company provided additional material after a meeting with the concerned parties. The inquiry will assess whether the differences stemmed from inaccurate disclosures, accounting methods, or other factors.

The IPO procedure was halted during the review, and the company subsequently withdrew its application. The investigation will examine the Pakistan Stock Exchange's role as a regulator, the consultant's due diligence, its involvement in the prospectus, and the auditor's review of financial statements. The inquiry will also assess the SECP's internal processes for reviewing IPO applications and managing complaints.