FIA registers case over alleged Unity Foods fund misuse

Mettis Link News reported that the Federal Investigation Agency has registered a criminal case against former management of Unity Foods and other accused after an SECP probe flagged alleged misuse of investor money. The FIR, filed on August 29 by the FIA Corporate Crime Circle Karachi under the Pakistan Penal Code, followed a referral under Section 41-B. The inquiry centres on a Rs3.75 billion rights issue, of which about Rs2.87bn was allegedly spent on purposes other than those disclosed.

The FIR alleges that Rs5.318bn of company money went to the former chief executive's mother in the form of a loan. A subsidiary is also alleged to have advanced Rs2.6bn to two parties who have yet to be identified. The probe also flagged an alleged difference of roughly Rs44.7bn between the reported financial statements and in-house SAP records. A further gap of about Rs5.2bn separates company records from physical inventory.

The probe also found no evidence for goods supplied against old liabilities of around Rs5bn. SECP chairman Dr. Kabir Ahmed Sidhu stressed that safeguarding investor money and ensuring clear financial reporting in listed companies is a priority. He added that protecting minority shareholders is a core duty, and that raised funds must be spent only on the purposes stated to investors.