The Securities and Exchange Commission of Pakistan (SECP) has issued a stern directive to all companies, instructing them to refrain from entering into agreements or contracts with surrogate companies originally associated with gambling, betting, and casino activities. This directive was communicated through the issuance of SRO(I)/2023 on the last Tuesday.
In the official notification, the SECP highlighted that the Ministry of Information and Broadcasting, under the title “Zero Tolerance for Surrogate Companies,” has alerted about the infiltration of certain surrogate companies involved in betting activities into the Pakistani market. These companies have reportedly engaged in sponsorship and advertisement contracts with various media and sports enterprises.
The SECP advisory emphasized the Ministry’s warning, urging companies not to enter into any agreements or business relationships with these surrogate entities. It further revealed that these companies, initially associated with gambling, betting, and casinos, often operated with the backing of hostile countries. The underlying motives were identified as aiming to undermine the moral fabric of Pakistan, introduce corruption in Pakistani sports, and facilitate the outflow of untaxed money in dollars, contributing to economic turmoil.
The proliferation of advertisements from such surrogate betting companies on various media platforms, including digital, electronic, social, and print media in Pakistan, raised concerns. The SECP deemed it crucial to halt the operations of these surrogate betting entities within the country.
The directive specifically addressed key entities involved in cricket, including the Pakistan Cricket Board (PCB), Pakistan Super League (PSL) franchises, club cricket, private leagues, television channels, radio broadcasters, internet platforms, newspapers, magazines, and other media/advertisement platforms. These entities were strictly advised not to engage in any agreements or business relations with surrogate companies associated with betting activities and to refrain from promoting them through advertisements.
Moreover, the SECP recommended the immediate termination of all existing agreements with such surrogate companies. The directive, issued under the powers vested in the SECP by Section 40B of the SECP Act, 1997, mandates all companies and Limited Liability Partnerships (LLPs) to ensure strict compliance with the advisory from the Ministry of Information and Broadcasting.
