SECP Freezes Bank Accounts of Nearly 40,000 Companies Over Missed Filings

The Securities and Exchange Commission (SECP) of Pakistan has placed 39,704 companies on inactive status due to their failure to file annual returns and financial statements for four years. This move restricts these companies from engaging in banking and financial services until they complete their outstanding filings. The regulator's intention is to enhance the reliability of Pakistan's corporate register and deter the misuse of dormant entities.

Companies in this inactive state cannot open new bank accounts, and their existing accounts are frozen. They are also barred from accessing financial services while flagged as inactive. To regain active status, these companies must submit all overdue filings. During their inactive period, any changes to the companies' directors will not be registered.

Lahore and Islamabad are the cities with the most inactive companies, each with 13,927 and 13,859 respectively. Karachi follows with 4,868, while Peshawar, Multan, Faisalabad, Gilgit, Quetta, and Sukkur also have significant numbers of inactive companies. These figures are reported city-wise by the SECP.

SECP Chairman Dr. Kabir Ahmed Sidhu emphasized that a transparent and reliable corporate register is crucial for fostering business confidence. He underscored the importance of separating inactive companies from the register to protect the financial system. According to Sidhu, companies can regain active status by fulfilling their legal obligations.