PECO Factory Sealed Over Unpaid Taxes

The Punjab government’s Excise and Taxation Department has taken action against Pakistan Engineering Company Limited (PECO), a publicly traded entity, by sealing its factory due to outstanding property taxes amounting to Rs1.9 million.

The company communicated this development to the Pakistan Stock Exchange (PSX) in a notification released on Thursday.

In its filing to the PSX, PECO stated that its “management is actively in contact with the concerned departments to settle the issue and ensure the reopening of the factory offices to prevent interruptions in administrative tasks.”

Update on Previously Announced Right Issue

Regarding the Right Issue previously announced by PECO in January 2025, the company has reported that the issue has been put on hold as a result of directives from the Securities and Exchange Commission of Pakistan (SECP) in two separate proceedings.

According to PECO, “The SECP has prohibited PECO from moving forward with the Rights Issue, citing regulatory constraints primarily because the company’s name is listed in the CIB report pertaining to an unpaid liability.”

PECO also mentioned it is engaging with relevant platforms to clarify that the proposed Right Issue is “intended to resolve these compliance issues, and as such, the restrictions should not be applicable.”

Historical Context of PECO

Originally known as Batala Engineering Company (BECO) when it was founded in 1950, PECO initially produced light engineering goods.

Historically, the company’s product line included high-quality machine tools, pumps, power looms, concrete mixers, cranes, power presses, electric motors, bicycles, steel rolled products, electricity transmission towers, structures, and general fabrication.

The initial plant was situated on 34 acres in Badami Bagh, Lahore, with the adjacent area evolving into Pakistan’s steel hub. Due to the increasing range of products, the existing land became insufficient for expansion, leading to the acquisition of 247 acres in 1960 in the Kot Lakhpat industrial zone, Lahore, for the eventual relocation of the factory.

Following its nationalization by the government in 1972, the company was renamed Pakistan Engineering Company (PECO).