Investigation alleges unauthorized deposits, guaranteed returns and a Ponzi-type investment scheme involving 35 complainants.
The Securities and Exchange Commission of Pakistan (SECP) has referred the Blink Capital Management (Private) Limited case to the Federal Investigation Agency (FIA) after an investigation uncovered alleged financial fraud involving Rs446.664 million.
The regulator said the move reflects its continued efforts to protect investors and strengthen transparency and integrity across Pakistan’s capital markets. The matter has been sent to the FIA for further investigation and legal action.
Investigation Follows Investor Complaints
SECP initiated proceedings against Blink Capital under Section 83 of the Futures Market Act, 2016, following complaints from investors who alleged that the company collected funds by promising fixed returns and repayment of their principal amounts.
Blink Capital Management was a licensed futures broker and market maker of the Pakistan Mercantile Exchange Limited (PMEX). However, the investigation found indications that funds were allegedly collected outside the scope of the company’s licensed activities.
According to the findings, 35 complainants submitted claims totaling Rs446.664 million. A detailed financial trail involving 29 complainants and Rs408.6 million showed that significant amounts had been transferred to accounts associated with Blink Capital, its former chief executive officer and director, as well as certain employees and related individuals.
The investigation also identified substantial cash withdrawals from the funds received.
Fixed Returns Raised Red Flags
The SECP found that investors had entered into agreements under which they were offered predetermined returns ranging from 3.7% per month to as high as 48% annually.
Post-dated cheques were reportedly provided as security for the investments, adding to concerns surrounding the arrangements.
Based on the evidence gathered during the investigation, the regulator concluded that Blink Capital had allegedly been operating a Ponzi-type fraudulent investment scheme involving unauthorized deposit-taking and promises of guaranteed returns.
The investigation pointed toward possible violations of the Companies Act, 2017, the Futures Market Act, 2016, and the Futures Brokers (Licensing and Operations) Regulations, 2018.
SECP Moves Case to FIA
Considering the seriousness of the findings, the SECP approved the referral of the case to the FIA under Section 41B of the SECP Act, 1997. The referral aims to facilitate further investigation and provide legal redress to affected investors.
SECP Chairman Dr. Kabir Ahmed Sidhu emphasized that the regulator would take firm action against market participants who misuse their regulated status or undermine investor confidence.
The SECP has also urged the public to remain cautious when considering investment opportunities, particularly schemes promising fixed or guaranteed returns.