The Securities and Exchange Commission of Pakistan has decided to conduct an inspection of the books of account of the M/s La Ville De Paris Housing Scheme Limited, which is involved in the unauthorized and illegal business of obtaining funds from the general public.
Sources told Propakistani that the SECP constituted a two-member team comprising Additional Joint Registrar of Companies and Assistant Registrar to conduct an inspection under Section 221 of the Act, and the powers delegated to me vide S.R.O. No. 575(I)/2018.
“The inspector will inspect all the records and books and papers of the company pertaining to its involvement in unauthorized and illegal business of obtaining funds within a period of not more than twenty (20) days and furnish a report on material and unusual transactions/occurrences, non-compliances if any and any other evasions relating to the affairs of the company,” sources added.
In addition, the SECP has also directed all the directors, managers, and other officers of the company to furnish all information that may be required by the inspector for inspection and to cooperate with the inspector with him in all respects.
Sources further said that M/s La Ville De Paris Housing Scheme Limited, a sister concern of Master Tiles &amp;amp;amp;amp; Ceramic Industries Limited, has declared that it shall not undertake or indulge, directly or indirectly, in the business of a Banking Company, Non-banking Finance Company (Mutual Fund, Leasing, Investment Company, Investment Advisor, Real Estate Investment Trust management company, Housing Finance Company, Venture Capital Company under the law.
However, SECP noticed from print and electronic media that it is inviting the public to purchase a certificate, namely ‘Le Paris Registration Certificate,’ to become entitled to investment in residential and commercial property schemes to be launched by the company in the future.
It was also observed that the company is offering a minimum guaranteed return per certificate and eligibility for lucrative cash prizes through a lucky draw.
Sources said that the SECP team has also carried out an undisclosed visit to the company to ascertain the factual position of the activities, and it revealed that the company is launching a society, namely “Le Paris,” for which they are in the process of purchasing 4,800 acres of land, soon they will have possession of the same.
Similarly, all the maps and plans are being made in Paris and they have entered into an agreement with the major brands in Paris that they will launch their brands in this society.
As per the representative, they are offering registration certificates for a price of Rs. 115,000. This certificate will be a confirmation that they will be given plots in the society like other developers Bahria Town and ARY Laguna, did and launched their limited membership forms.
The buyer of this certificate will be able to adjust this certificate against installments of the plot at an amount of Rs. 145,000, and the buyer of this certificate will instantly gain a profit of Rs. 30,000 on each certificate, Moreover, in the future, the company based on market value can change the adjustment value to a higher amount.
When inquired about guarantee for the investors, the company representative told Master Tiles &amp;amp;amp;amp; Ceramic is standing behind this project.
In light of the aforementioned, it is evident that the company is taking deposits from the general public and is issuing registration certificates as an acknowledgment of that deposit.
It is apparent that the company is involved in issuing registration certificates for monetary value and announced a lucky draw to lure potential investors as per the promotion extracted from the website. This prima facie indicates the involvement of the company in unauthorized and illegal business of obtaining funds from the general public.
In view of the above, the Commission considered that a probe is needed with regard to the business being carried on by the company, and the books of account and other relevant books and papers are required to be inspected in terms of section 221 of the Companies Act, 2017 (the “Act”) to ascertain, whether:
1. The Company is carrying on the business of advertisement/marketing of projects of other companies having real estate business as claimed by the Company or the Company itself is indulged in the business of real estate by inviting deposit from the public as an investment for hefty returns.
2. The Company is involved in taking deposits on behalf of its associated/related companies/undertakings.
3. The Company is complying with the mandatory provisions of the Act, including with regard to the maintenance of books of accounts and other books and papers.
4. Any unusual or suspicious transactions/occurrences, non-compliances, if any, particularly in AML/CFT perspective, and any other evasions relating to the affairs of the Company and other companies, have been observed.
5. The affairs of the Company are being managed in accordance with sound business principles or prudent commercial practices.
Source: Pro Pakistani