The Securities and Exchange Commission of Pakistan (SECP) has expanded its investigation into the withdrawn initial public offering (IPO) of SE Fruits and Vegetable Limited, seeking financial and export-related records from 37 banks to verify the company’s reported sales, foreign remittances and export proceeds. The investigation follows discrepancies identified between the company’s sales figures in its IPO prospectus, tax filings and amounts credited to its bank accounts. The proposed IPO, which could have raised between Rs1.2 billion and Rs1.92 billion, was withdrawn in October after the regulator suspended further proceedings over concerns about disclosures made to investors.
SE Fruits and Vegetable Limited, an exporter of kinnow, mangoes and potatoes based in Sargodha, had presented its business as an established export operation serving markets in the Middle East, Central Asia and the Far East. The business had reportedly operated since 1998 under the name Shaheen Enterprises before being converted into a public limited company in 2026. Its IPO proposal was designed to raise working capital for purchasing agricultural produce during seasonal periods and expanding export activity. The company planned to offer 30 million shares, representing 32.01% of its enlarged share capital, at a floor price of Rs40 per share, with the possibility of the price reaching Rs64 during book-building.
The offering was expected to generate proceeds ranging from Rs1.2 billion to Rs1.92 billion. Topline Securities and Growth Securities were appointed as joint lead managers for the transaction. According to the prospectus, the company projected export revenue of approximately $4 million in FY2026, with expectations of increasing that figure to around $18 million in FY2027. These projections formed an important part of the investment case presented to prospective shareholders, particularly because the company intended to use the funds to increase its capacity to purchase and export agricultural products.
The IPO process initially progressed through the required approval stages. The Pakistan Stock Exchange (PSX) invited public comments on the draft prospectus in early August and approved the listing on September 7, 2026. The SECP approved the prospectus two days later, while institutional book-building took place on September 21 and 22. Demand during the institutional phase reached 1.6 times the shares offered within two hours, and the shares were priced at the floor rate of Rs40. However, the transaction did not proceed to completion. On October 13, the company announced that it was withdrawing its IPO application, referring to regulatory concerns regarding disclosures in its prospectus. The SECP had already suspended further proceedings after book-building to protect investors.
The regulator’s latest action focuses on establishing whether the company’s declared business activity and export earnings are supported by verifiable financial records. In a press release issued on November 7, the SECP confirmed that it had requested export records from seven banks associated with the company. It has also approached 30 banks for information about foreign remittances, export proceeds and other foreign exchange received in accounts belonging to the company’s sponsors and directors. Some banks have submitted responses, which are currently being examined by the commission. These requests are intended to help investigators compare the financial activity recorded by banking institutions with the figures presented in the IPO documentation.
The investigation follows concerns raised through an anonymous complaint received by the regulator on September 11, according to reporting by Dawn. The complaint questioned the company’s reported sales figures shortly after the prospectus had received SECP approval. A preliminary review identified several inconsistencies, including differences between sales declared in the prospectus and figures appearing in the company’s sales tax returns for the 2022–2026 period. The regulator also identified local sales that were missing from the company’s 2024 income tax return. Further questions emerged when the reported sales did not correspond with the money received in the company’s bank accounts, even after allowing for outstanding receivables at the end of the relevant financial periods.
These discrepancies have made the verification of export proceeds a central part of the inquiry. Sales reported by an exporting company should be supported by documentation showing that goods were shipped and the corresponding payments were received through recognised banking channels. By obtaining records from the company’s banks, the SECP can compare reported export activity with actual foreign currency receipts and other relevant transactions. The request for information from the personal accounts of sponsors and directors is also intended to establish whether foreign funds associated with the business were received outside the company’s accounts. Such verification may help explain whether the differences resulted from incomplete reporting, incorrectly classified receipts or other financial arrangements. The regulator has not publicly established the cause of the discrepancies, and its findings will depend on the examination of the available records.
The SECP formally initiated its investigation on October 21 under Section 29 of the SECP Act, 1997, read with Section 139 of the Securities Act. Its inquiries extend beyond the company and the banks to other institutions and professionals involved in preparing and reviewing the IPO. The commission is examining information submitted by the joint lead managers, Topline Securities and Growth Securities, as well as a response from Parker Russell–A.J.S., identified as a consultant to the issue. The company’s auditor, Ilyas Saeed & Co., has requested additional time to provide its records, and the SECP has granted an extension.
The Central Depository Company (CDC) has also provided an investor list to the regulator. The SECP subsequently requested shareholder lists and share-transfer histories relating to individuals and entities named in the prospectus. The CDC submitted a partial response on November 2. These records could help establish the ownership history of the company and determine whether shareholding changes took place before the proposed public offering that were not adequately reflected in the disclosures. The examination of shareholder information is another part of the wider effort to verify the accuracy and completeness of the prospectus.
The investigation has also raised questions about the conversion of Shaheen Enterprises from a long-running partnership into a public limited company incorporated in 2026. When an established business changes its legal structure, its earlier financial performance may be used to present a longer operating history to investors. The reliability of that history depends on the quality of the underlying records and the way the previous business’s financial information has been transferred and presented. In the SE Fruits case, the regulator is examining whether the historical figures used in the prospectus can be supported by the available tax, banking and business records.
Beyond the company’s financial position, the SECP is reviewing the responsibilities of the institutions and professionals involved in the IPO process. The inquiry is expected to examine the role of the PSX as a front-line regulator, the due diligence conducted by the consultant, the work performed by the auditor, and the SECP’s own procedures for reviewing prospectuses and responding to complaints. The case has drawn attention to how financial information can move through several approval stages without apparent inconsistencies being resolved before an offering reaches institutional investors.
The regulator has also used the episode to highlight the need for a stronger Audit Oversight Board with effective inspection and enforcement powers. The issue is particularly relevant for smaller companies seeking access to Pakistan’s capital market, where investors rely heavily on audited accounts, prospectus disclosures and the due diligence performed by appointed advisers. If financial information is not properly verified before an IPO, investors may be exposed to risks that are difficult to assess from publicly available documents alone.
Although the SE Fruits IPO was withdrawn and investors reportedly received their money back within weeks, the investigation remains important for confidence in future listings. Institutional investors had committed funds during book-building based on information that was already under regulatory examination. The SECP’s review will need to establish how the discrepancies emerged, whether the prospectus contained inaccurate or incomplete information, and whether the existing checks were sufficient to identify the issues before the offering progressed.
SE Fruits has indicated that it intends to return to the IPO market with fuller disclosures. Any future attempt to list will therefore depend on the resolution of the concerns surrounding its financial history and the verification of its reported business activity. The records requested from banks, market institutions, advisers and the auditor will be central to determining whether the company’s sales figures accurately reflected its operations. The outcome may also influence how regulators, auditors and financial advisers approach due diligence for smaller companies seeking public investment in Pakistan.
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