The Federal Investigation Agency (FIA) has registered a criminal case against former executives and directors of Unity Foods Ltd. after a securities regulator investigation alleged the misuse of billions of rupees in company and shareholder funds, falsification of accounts and other financial irregularities.
The FIA’s Corporate Crime Circle in Karachi registered the case on Aug. 29 on a referral from the Securities and Exchange Commission of Pakistan (SECP) under Section 41B of the SECP Act, 1997.
The FIR names former Unity Foods CEO Muhammad Farrukh Amin Godil, Fehmida Amin, CFO Jalees Edhi, former director and chief executive Amir Shehzad and director Safdar Sajjad. The allegations have yet to be proven in court.
According to the FIR, the SECP’s investigation identified alleged transactions involving shareholder funds, company assets, subsidiary operations and financial reporting that investigators said warranted a criminal investigation.
Rights issue funds
Unity Foods raised Rs. 3.75 billion from shareholders and the investing public through a rights issue announced in February 2019 for expansion and diversification, including the acquisition of assets, additions to its Port Qasim refinery and the establishment of an oil terminal, according to the FIR.
Investigators said the company could provide supporting evidence for the use of only Rs. 876.6 million. Documentation, including vouchers or banking instruments, was allegedly not produced for the remaining Rs. 2.873 billion. The FIR alleges that investors were induced to subscribe to the rights issue based on representations regarding the intended use of the funds and that the money was subsequently misapplied.
Alleged loan
The FIR also alleges that Rs. 5.318 billion of company funds were paid to the former CEO’s mother under the guise of loans. According to the SECP referral cited in the FIR, Unity Foods recorded loans from Fehmida Amin during the financial years 2017-18 and 2018-19 and subsequently recorded payments to her.
Investigators alleged that no banking instruments or board approvals were produced to support either side of the transactions and alleged that company funds had been misappropriated through false loan entries.
Subsidiary advances
The investigation also identified alleged advances of Rs. 2.6 billion through Unity Foods’ wholly owned subsidiary Sunridge Foods Pvt. Ltd. to two undisclosed parties.
The FIR alleges the advances were made without the required documentation, authorization or approvals. It also refers to related-party exposures, including interest-free advances of about Rs. 2 billion, that were reported to the company’s board by its chief financial officer in February 2026.
The FIR further alleges that two former Unity Foods subsidiaries, Unity Technologies Pvt. Ltd. and Unity Plantations Pvt. Ltd., were transferred to individuals within the group without adequate due diligence, arm’s-length arrangements or necessary approvals.
The sale proceeds of Rs. 499.9 million for Unity Technologies and Rs. 787 million for Unity Plantations were still outstanding, according to the FIR.
At the same time, the FIR alleges that Unity Foods deposits of about Rs. 7.25 billion with BankIslami Pakistan Ltd. and Rs. 5.2 billion with Al Baraka Bank Pakistan Ltd. remained under lien against borrowings by Unity Technologies. The investigators alleged that company assets had been pledged against obligations of an entity that had been transferred to insiders.
Al-Shaheer transactions
Additionally, the FIR raises allegations regarding the use of Unity Foods and group resources in connection with Al-Shaheer Corporation Ltd. According to the investigation, the former CEO entered into an arrangement related to acquiring control of Al-Shaheer while serving as Unity Foods’ chief executive.
The FIR alleges that goods worth approximately Rs. 1.1 billion were sold by Unity Foods to Al-Shaheer without corresponding recovery. It also alleges that Sunridge Foods paid certain expenses and liabilities of Al-Shaheer and that Unity Foods’ funds, inventory, staff and infrastructure were used for the benefit of the company.
Investigators alleged that company resources were diverted for the benefit of a business being acquired by the former CEO through nominees.
Accounting and inventory discrepancies
The SECP investigation also identified an alleged difference of approximately Rs. 44.7 billion between Unity Foods’ published financial accounts and its internal SAP records, according to the FIR. Investigators further cited an inventory shortfall of about Rs. 5.2 billion between SAP records and physical stock.
The FIR also alleges that receivables of approximately Rs. 5 billion were recorded from Sunridge Mart Pvt. Ltd. without sufficient evidence that goods had been delivered. Other alleged irregularities cited in the FIR include receivables recorded against a purported customer without adequate commercial documentation, delayed recording of sales worth about Rs. 1.1 billion and inconsistencies in trade-payable reconciliations.
The FIR also said Unity Foods had failed to prepare and publish half-yearly accounts for the period ended Dec. 31, 2025.
Criminal investigation
The FIA said the allegations, if established, could constitute offenses including criminal breach of trust, cheating and falsification of accounts under Sections 406, 420 and 477-A of the Pakistan Penal Code, read with Sections 109 and 34.
The agency said the role of other directors, officers, recipients of the Rs. 2.6 billion advances, purchasers of former subsidiaries, brokers, statutory auditors and other individuals would be examined during the investigation.
The FIA said it would also investigate the movement and ultimate destination of funds linked to the alleged transactions.
SECP Chairman Kabir Ahmed Sidhu said the regulator was committed to protecting investors’ funds and ensuring transparent financial reporting by listed companies. He said safeguarding minority shareholders’ rights was a fundamental responsibility of the SECP and that funds raised from investors should be used only for their disclosed purposes.
Shareholders also have a fundamental right to accurate and transparent financial information, Sidhu said.
The registration of the FIR initiates a criminal investigation, and the allegations against the accused remain subject to investigation and judicial proceedings.