Alleged misuse of funds: SECP findings lead to FIA case against food co

ISLAMABAD: An inspection and subsequent actions, including the initiation of investigation proceedings by the Securities and Exchange Commission of Pakistan (SECP) into the alleged misuse of funds by Unity Foods Limited, have led the Federal Investigation Agency (FIA) to register a criminal case over the alleged misuse of shareholders’ and company funds, falsification of accounts, and other serious financial irregularities. Unity Foods is a public-listed company on the Pakistan Stock Exchange (PSX) and has raised funds from public shareholders. The case is particularly significant from an investor-protection perspective because the alleged irregularities include the possible diversion of funds raised from shareholders for identified business purposes. According to the SECP reference, Unity Foods raised Rs3.75 billion through a rights issue in 2019 for expansion and diversification, including the acquisition of assets, additions to its refinery at Port Qasim, and the establishment of an oil terminal. SECP’s examination found that approximately Rs2.87 billion of these proceeds were allegedly diverted from their stated purposes, as the Company failed to provide evidence of the utiliza