Factory Sealed Due to Unpaid Property Tax of Rs1.9 million
Pakistan Engineering Company Limited (PECO) Faces Property Tax Issues and Securities Regulatory Restrictions
In a significant development, the Excise and Taxation Department of the Punjab government has sealed the factory premises of publicly listed PECO Limited due to non-payment of property tax amounting to Rs1.9 million. The company announced this development in a notice to the Pakistan Stock Exchange (PSX) on Thursday.
According to the notice, PECO's management is actively engaging with the relevant authorities to resolve the matter and ensure restoration of access to the factory offices to avoid disruption in administrative functions. The sealing of the factory premises could potentially disrupt operational capabilities.
Additionally, PECO announced that it has not proceeded with the Right Issue, as initially announced in January 2025, due to regulatory restrictions imposed by the Securities and Exchange Commission of Pakistan (SECP). The SECP's decision is linked to PECO's name appearing in the Credit Information Bureau (CIB) report due to an overdue liability. PECO is actively pursuing appropriate forums to clarify that the proposed Right Issue is aimed at addressing these very compliance concerns, and therefore, the restrictions should not apply in such a context.
Established under the name of Batala Engineering Company (BECO) in 1950, PECO manufactured a variety of products, including machine tools, pumps, power looms, and electricity transmission towers. Initially set up at Badami Bagh, Lahore, the company later acquired 247 acres of land in 1960 at Kot Lakhpat industrial zone, Lahore, for expanding its operations. After being taken over by the government in 1972, it was rechristened Pakistan Engineering Company (PECO).
The ongoing issues with property tax and regulatory restrictions could potentially impact any potential privatization efforts for PECO. The company has committed to keeping its shareholders updated on any significant developments as the situation continues to evolve.
- Despite the manufacturing industry being a significant part of PECO's business, the ongoing property tax issues and securities regulatory restrictions could potentially hinder financing opportunities in the finance sector.
- In light of the company's cancelled Right Issue due to regulatory restrictions, the future expansion plans and growth of PECO, a key player in the engineering industry, might face challenges.
