Unity Foods funds misuse case FIA launches probe after SECP findings
The Unity Foods funds misuse case has taken a serious turn. The Federal Investigation Agency (FIA) has filed a criminal case. It targets the former management of Unity Foods Limited, a Pakistan Stock Exchange listed company. The move follows an investigation by the Securities and Exchange Commission of Pakistan (SECP). The regulator found major financial irregularities. Therefore, it referred the matter to the FIA under Section 41-B.
Allegations of Misused Funds and Loans
According to the FIR, Unity Foods raised Rs3.75 billion through a rights issue. However, about Rs2.87 billion was allegedly used for other purposes. These uses did not match the official disclosures. In addition, the FIR claims that Rs5.318 billion was given as a loan. The payment reportedly went to the mother of the former CEO. This transaction has raised serious concerns. Another deal is also under review. A company subsidiary allegedly transferred Rs2.6 billion to two unknown parties. As a result, investigators are examining the full trail of funds.
Major Financial Discrepancies Uncovered
The SECP probe revealed large gaps in financial records. For example, there is a reported difference of Rs44.7 billion. This gap exists between published accounts and internal SAP records. Moreover, investigators found an inventory mismatch of about Rs5.2 billion. The company’s records did not match the actual physical stock. Therefore, this raised red flags about reporting accuracy. Officials also noted missing evidence for old liabilities. These liabilities are worth nearly Rs5 billion. There is no clear proof of goods supplied against them.
SECP Vows Investor Protection
SECP Chairman Kabir Ahmed Sidhu stressed investor safety. He said the regulator will protect minority shareholders. In addition, he emphasized transparent financial reporting. Sidhu also stated that companies must use investor funds responsibly. Funds raised should match the disclosed purpose. Therefore, strict action will follow any violation.
Company Background
Unity Foods began as a private company in 1991. Later, it became a public limited company the same year. Initially, it operated in the textile sector as Taha Spinning Limited. However, due to losses, it changed direction. The company moved into edible oil extraction and refining. This shift defined its current business model.
