SECP probes alleged insider trading in Unity Foods shares

The Securities and Exchange Commission of Pakistan (SECP) has stepped up an investigation into alleged insider trading and unusual transactions in shares of Unity Foods Limited, a company listed on the Pakistan Stock Exchange (PSX), summoning four individuals, including the company’s chief executive, for questioning on Thursday. The SECP has issued final notices to Unity Foods CEO Muhammad Farrukh, Safdar Sajjad, Fahmida Amin and Hina Safdar, directing them to appear before its investigation team in their personal capacity on September 3. The regulator is seeking responses and records relating to unusual trading activity in Unity Foods shares, including a complete record from Farrukh of the company’s shares pledged with banks, according to the notices. Sajjad, Amin and Hina Safdar have been asked to explain their purchase and sale of Unity Foods shares and provide relevant trading records and supporting documents. The four individuals had failed to appear before the investigation team despite being summoned on August 31, prompting the SECP to issue final notices. The formal investigation into trading in Unity Foods shares has been underway since June 2 and is being conducted under Section 139 of Pakistan’s Securities Act, 2015, said SECP. The investigation is examining unusual transactions in the company’s shares and possible violations of securities laws. The development comes days after the Federal Investigation Agency (FIA) registered a criminal case against the former management of Unity Foods Limited over alleged financial irregularities, including discrepancies of about Rs44. 7 billion between published accounts and internal records, following an investigation by the SECP. Unity Foods Limited was incorporated in Pakistan as a private limited company in 1991 and later converted into a public limited company on June 16, 1991. Initially operating in the textile sector as Taha Spinning Limited, the company faced operating losses and financial problems, leading to a shift in its principal business activity to edible oil extraction, refining, and related businesses under the new name Unity Foods.

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