ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has referred a case against Unity Foods Limited to the Federal Investigation Agency (FIA).

The FIA has registered a criminal case over alleged misuse of company funds, questionable transactions and major discrepancies in financial records.

Unity Foods is listed on the Pakistan Stock Exchange (PSX). The company has also raised funds from public shareholders.

The case has raised concerns about the use of investors’ money and the accuracy of the company’s financial reporting.

According to the SECP reference, Unity Foods raised Rs3.75 billion through a rights issue in 2019.

The company planned to use the money for expansion and diversification. The projects included asset purchases, expansion of its refinery at Port Qasim and the establishment of an oil terminal.

The SECP examined the use of these funds. The regulator found that the company could not provide evidence for the use of around Rs2.87 billion.

The SECP has therefore raised questions about where and how the funds were used.

The SECP probe also found several other transactions that require further investigation.

These include alleged payments of Rs5.318 billion from company funds to the mother of the former CEO.

The transactions reportedly involved loan receipts and repayments. However, the company did not provide the required banking instruments and board approvals, according to the SECP reference.

The probe also identified an alleged Rs2.6 billion advance through a subsidiary to two undisclosed parties.

The SECP has also raised questions about other related-party transactions and financial exposures.

The investigation has also highlighted major differences between Unity Foods’ financial records.

According to material referred by the SECP, the company’s published accounts showed an alleged Rs44.7 billion difference from its internal SAP records.

The probe also found an alleged Rs5.2 billion difference between inventory recorded in SAP and physical stock.

Another issue involves around Rs5 billion in aged receivables. The SECP said investigators found no corresponding evidence of goods being delivered for these amounts.

These issues could have a major impact on investors. Shareholders and lenders rely on financial statements to assess a company’s financial position.

The SECP probe also raised questions about the disposal of company subsidiaries.

Investigators will examine the alleged use of Unity Foods’ funds, inventory and other resources for the benefit of connected entities.

The FIA will now trace the movement of funds. It will also identify the alleged beneficiaries.

The agency will examine the role of directors, officers and other people linked to the transactions.

The SECP first started proceedings under the Companies Act, 2017.

The Commission later referred the matter to the FIA under Section 41-B of the SECP Act, 1997.

The SECP said some of the matters could involve criminal offences. It therefore referred those matters to the FIA for further investigation under criminal law.

The FIA’s Corporate Crime Circle Karachi registered the FIR on August 29, 2026.

The case includes Sections 406, 420, 477-A, 109 and 34 of the Pakistan Penal Code.

The FIR names former management and other accused persons.

The FIA will now investigate the alleged criminal liability of the accused. It will also examine the role of other directors, officers, beneficiaries and connected parties.

SECP Chairman Dr. Kabir Ahmed Sidhu said the regulator would continue to take firm action to protect investors.

“Protection of minority shareholders is a fundamental responsibility of SECP,” he said.

He said companies must use funds raised from investors for their stated purposes.

He also stressed that shareholders have a right to accurate and transparent financial information.

The SECP chairman said the Commission would strengthen oversight of listed companies and take action when investors’ interests face risks.

The FIA will now examine the allegations and determine the facts.

The investigation will focus on the flow of funds, financial records and the role of the accused and other connected persons.

The allegations remain under investigation and have not been proven in court. The accused will be dealt with according to law.

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