Regulatory Paralysis: How FBR and SECP Failed to Halt Systemic Corporate Exploitation

The case of Background Check Group (HRPM-BCG20260) serves as a stark indictment of Pakistan’s regulatory landscape. Despite a clear trail of forged board resolutions, unauthorized share transfers, and PKR 17M+ in fraudulent transactions, the Securities & Exchange Commission of Pakistan (SECP) and banking regulators remained dormant, effectively enabling a hostile takeover by internal bad actors.

Key Findings

Failure of Surveillance

The SECP failed to flag the illegitimate termination of company directors and subsequent Form A/29 filings that were processed despite active disputes. This regulatory oversight allowed the syndicate led by Mohammad Imran Haroon to legalize an internal coup. Banking institutions similarly failed to trigger 'red flag' protocols during the manipulation of 'bank positions' and salary manipulation involving ghost employees.

Institutional Complicity or Incompetence?

SECP: Accepted filings that were later revealed to be based on forged official memos.

FBR: Failed to detect systemic tax evasion and fraudulent debt fabrication of PKR 15.8M.

NADRA: The VeriSys service provider role was compromised, failing to prevent identity hijacking within the corporate structure.

Evidence & Data

Case data confirms 161 bank documents were manipulated. The fact that an 'Initial Technical Report' was deemed a forensic impossibility highlights the lack of expertise and integrity within the investigative bodies that the SECP relies upon. The status of the investigation as 'SUBSTANTIALLY COMPLETE' with a 'PROSECUTE' recommendation underscores that the crime was detectable had regulators performed their fiduciary duties.

Legal Framework

Under the Companies Act 2017 (Pakistan), the SECP has a mandate to prevent fraud and protect the interests of shareholders. The failure to intervene in the HRPM-BCG20260 case violates the principles of Good Governance as outlined by the OECD and the UN Convention Against Corruption, to which Pakistan is a signatory.

Recommendations

A legislative review of the SECP’s automated filing system to ensure manual verification for disputed corporate entities.

Disciplinary action against the specific SECP and FIA officers who overlooked the 'Broken Chain of Custody' regarding digital evidence.

Immediate freezing of all accounts linked to the PKR 17M fraud to prevent further capital flight.

Read the full case file on HRPM: HRPM-BCG20260.