The Board of Directors of Pakistan Engineering Company Limited (PECO), a public-listed company, has taken a decisive step toward revival by approving five years of delayed financial accounts to be approved by the general body meeting of its shareholders scheduled to take place on February 17, 2025. These accounts will now be presented for approval at the general body meeting of shareholders scheduled for February 17, 2025. This milestone follows years of catastrophic mismanagement under its former Managing Director (MD), Mr. Mairaj Anis Ariff, a nominee of the Ministry of Industries and Production (MoIP), whose tenure brought the company to the brink of ruin, with financial losses exceeding PKR 1.2 billion.
The former MD, not only disregarded directives from the MoIP, the Securities and Exchange Commission of Pakistan (SECP), and the Ministry of Law but also actively prevented the Board of Directors from performing their duties. In 2018, Mr. Mairaj Anis Ariff barred Board members from entering the company premises and operated PECO’s bank accounts without legal authority, with single signature. The company’s accounts remained unaudited for over four years, with no Annual General Meetings (AGMs) held and no tax returns filed leading to its placement on the Pakistan Stock Exchange’s defaulters’ list. This neglect plunged PECO into default with suppliers and financial institutions.
The scale of the damage inflicted under the previous regime is staggering. Once a thriving enterprise, the company suffered mammoth financial losses and a near-total collapse of operations. Irreplaceable assets were squandered or allowed to deteriorate, while trade receivables worth hundreds of millions, stock-in-trade, and creditors’ balances were consumed to fund the losses, bringing the company’s core business operations to a complete halt. Defaults to financial institutions and suppliers further tarnished the company’s creditworthiness. As a result, approximately 450 workers were retrenched, leaving the current workforce reduced to just 34 employees.
Following the removal of Mr. Mairaj Anis Ariff, the architect of PECO’s decline, in 2022 through the intervention of the PDM government led by Prime Minister Shahbaz Sharif, and the restoration of the elected board, significant progress has been made. Under the Board’s guidance, the management has worked diligently to reconstruct the company’s financial records, rebuild its systems, and restore its reputation. “This is a tragic example of the damage caused by unchecked mismanagement and neglect, but today marks a turning point,” said Mr Mirza Mahmood Ahmad, Chairman of the Board of Directors, PECO. “By approving these accounts, we are re-establishing transparency, accountability, and a foundation for PECO’s revival.”
To address the severe liquidity crisis and stabilize operations, the Board has announced a rights issue aimed at restoring the company’s financial health and providing shareholders with an opportunity to support its turnaround. The funds raised will also be utilized to settle overdue liabilities, as the company faces recovery suits from suppliers and financial institutions.
These steps are critical for ensuring that PECO’s revival efforts are sustained and that such abuses of power are prevented in the future and PECO achieves its past glory while generating significant employment.
