The Punjab Excise and Taxation Department has sealed the factory premises of Pakistan Engineering Company Limited (PECO), a publicly listed entity, over non-payment of property tax amounting to Rs1.9 million. The company reported the development in an official notice to the Pakistan Stock Exchange (PSX) on Thursday.
In the filing, PECO stated that its management is actively engaging with provincial authorities to resolve the matter and ensure the reopening of its factory offices to avoid disruptions in ongoing administrative operations.
Privatisation and Rights Issue on Hold
The sealing comes at a critical time for PECO, as the Privatisation Commission of Pakistan recently initiated the company’s privatisation process. Meanwhile, the company has also hit a regulatory roadblock regarding its proposed Rights Issue, initially announced in January 2025.
According to PECO, the Securities and Exchange Commission of Pakistan (SECP) has instructed the company not to proceed with the Rights Issue, citing concerns based on the company’s appearance in the Credit Information Bureau (CIB) report for an unresolved liability.
PECO argues that the Rights Issue was intended to address such liabilities and compliance issues, and is now pursuing legal and regulatory forums to contest the SECP’s restrictions.
A Legacy of Engineering Excellence
Originally founded in 1950 as Batala Engineering Company (BECO), PECO has a storied industrial history. It was renamed Pakistan Engineering Company after being nationalised in 1972. The company has manufactured a wide range of engineering products, including machine tools, electric motors, bicycles, cranes, steel structures, and transmission towers.
Its initial facility was set up on a 34-acre plot at Badami Bagh, Lahore. With expansion in mind, PECO acquired an additional 247 acres in Kot Lakhpat in 1960, which later became a central hub for steel and heavy engineering production in the region.
As PECO faces tax recovery and regulatory constraints, its future hinges on resolving the financial and administrative issues with government departments. Stakeholders await updates on whether the company can resume its operations, clear its dues, and move forward with its privatisation and recapitalisation plans.
