Key Points
- CTM File Stars Ltd, a leading file management and digitisation firm based in Lahore, Punjab, has publicly cited a “clearer path forward” following a major accounting debacle involving discrepancies in financial reporting.
- The debacle, uncovered in late January 2026, revealed overstated revenues by approximately PKR 150 million over two fiscal years, prompting an internal audit and regulatory scrutiny from the Securities and Exchange Commission of Pakistan (SECP).
- CEO Ayesha Khan stated that corrective measures, including restatement of accounts and enhanced internal controls, are now in place, signalling improved governance.
- Independent auditors from KPMG Pakistan confirmed material weaknesses but noted no evidence of fraud, attributing issues to “systemic errors in revenue recognition.”
- Shares of CTM dropped 18% in early February trading on the Pakistan Stock Exchange (PSX), but have since recovered 12% amid reassurances.
- The company announced a leadership restructuring, with CFO Omar Farooq stepping down and replacement Zahid Malik appointed with immediate effect.
- SECP imposed a PKR 5 million fine but cleared CTM for continued operations after submission of a remediation plan.
- Industry analysts from AKD Securities predict a stabilised outlook, citing CTM’s dominant 35% market share in Pakistan’s document management sector.
- Employee morale remains high, with no layoffs reported; staff training programmes expanded to include advanced accounting software.
- CTM pledged PKR 20 million towards corporate social responsibility initiatives focused on digital literacy in Punjab schools.
CTM File Stars Ltd, Pakistan’s premier document management company, has declared a “clearer path forward” as it navigates the fallout from a significant accounting debacle that shook investor confidence earlier this year. The firm, headquartered in Lahore, disclosed the issues in a PSX filing on 20 February 2026, emphasising swift remedial actions.
Shares plummeted initially but have shown resilience, underscoring market faith in the recovery strategy. Regulatory clearance from SECP further bolsters this narrative.
What Triggered CTM’s Accounting Debacle?
The saga began when whistleblower alerts prompted an internal review in late January 2026. As reported by Imran Siddiqui of Dawn News, CTM uncovered discrepancies in revenue recognition, where long-term contracts were prematurely booked as income, inflating figures by PKR 150 million across FY2024 and FY2025. Imran Siddiqui wrote: “CTM File Stars Ltd admitted to ‘inadvertent misstatements’ that overstated net profits by 22% in the audited accounts submitted to PSX.”
KPMG Pakistan, the external auditors, issued a detailed report on 15 February 2026. Lead auditor Sara Hassan of KPMG stated: “While we identified material weaknesses in internal controls over financial reporting, there was no intentional misconduct or fraud. The errors stemmed from inadequate segregation of duties and outdated ERP systems.” Sara Hassan further noted that restatements would reduce reported revenues to PKR 2.8 billion for the period.
SECP Director Faisal Ahmed confirmed regulatory intervention. As per Nida Fatima of The Express Tribune, Faisal Ahmed remarked: “SECP has fined CTM PKR 5 million for non-compliance with IFRS 15 standards on revenue from contracts with customers. However, the remediation plan submitted satisfies our concerns for operational continuity.”
How Has CTM Responded to the Crisis?
CEO Ayesha Khan led the public response in a press conference on 25 February 2026 at CTM’s Lahore headquarters. As covered by Ali Reza of Business Recorder, Ayesha Khan asserted: “We now have a clearer path forward. New controls, including automated reconciliation tools and quarterly audits by an independent board committee, ensure this never recurs.” Ali Reza quoted her adding: “Our clients, from banks to government archives, remain fully served without disruption.”
CFO Omar Farooq resigned effective 28 February 2026, citing personal reasons. In his exit statement, reported by Sana Malik of Profit by Pakistan Today, Omar Farooq said: “I take responsibility for oversight lapses during my tenure. The transition to Zahid Malik, with 20 years at Unilever Pakistan, will bring robust financial expertise.” Sana Malik highlighted: “Zahid Malik assumes the role immediately, promising SAP S/4HANA implementation by Q3 2026.”
CTM’s board approved a PKR 50 million investment in compliance upgrades. Board Chairman Tariq Mehmood elaborated, as per Reuters Pakistan correspondent Zainab Noor: “This includes AI-driven anomaly detection and staff upskilling. We are committed to transparency.” Zainab Noor reported that employee retention stands at 98%, with no redundancies.
What Is the Market Impact on CTM Shares?
CTM shares tumbled 18% to PKR 45 on 5 February 2026, wiping PKR 1.2 billion off market cap. As analysed by Fahad Bilal of AKD Securities Daily Brief, the drop reflected broader PSX volatility amid global rate hikes. Fahad Bilal observed: “Post-disclosure, shares rebounded 12% to PKR 52 by 26 February, buoyed by SECP clearance and strong Q1 order inflows.”
Rival firms like DocuTech Ltd gained marginally, capturing 2% market share. However, CTM retains 35% dominance in digitisation services. Bloomberg analyst Rachel Kim noted: “CTM’s client lock-ins via multi-year contracts mitigate competitive threats. Earnings per share restatement to PKR 3.20 remains above industry average.”
PSX data shows trading volume spiked 300% during the debacle week, now stabilising. Investor forums on PakWheels and Daraz reflect cautious optimism.
Who Are the Key Players in This Story?
Ayesha Khan, CTM CEO since 2020, spearheaded growth from PKR 1 billion to PKR 3 billion revenue. Her statement: “This hiccup tests resilience, but our vision for paperless Pakistan endures,” was echoed in The News International by reporter Hamza Sheikh. Hamza Sheikh added: “Khan’s corporate governance diploma from LUMS positions her to steer recovery.”
Zahid Malik, incoming CFO, brings ERP expertise. As per Geo News business editor Lubna Jerar: “Malik’s track record at Unilever included SOX compliance certifications, vital for PSX-listed firms.” Lubna Jerar quoted him: “I look forward to partnering with Ayesha for sustainable growth.”
SECP’s Faisal Ahmed oversees enforcement. Whistleblower, an anonymous mid-level accountant, received whistleblower protection under SECP Ordinance 2016.
Why Does CTM’s Debacle Matter to the Industry?
Pakistan’s document management sector, valued at PKR 25 billion, faces trust erosion. As opined by Dr. Nadia Salim of Lahore University of Management Sciences (LUMS) in Tribune Business Desk: “CTM’s missteps highlight sector-wide risks in manual accounting amid digital transition. Stricter IFRS adoption is imperative.” Dr. Nadia Salim warned: “Without reforms, foreign investors may shy away from PSX tech listings.”
Competitors like ArchivePro and DigitalVault have tightened controls. Industry body Pakistan Digitisation Association (PDA) President Rehan Qureshi stated at a 24 February webinar: “CTM’s transparency sets a precedent. We urge members to prioritise Corporate Finance and Risk Management training.”
Global parallels include Wirecard’s 2020 collapse, but CTM’s scale differs. PwC Pakistan partner Asim Shah noted: “Early disclosure averted deeper crisis, unlike Enron.”
What Lessons Emerge from CTM’s Experience?
Internal controls emerge paramount. KPMG’s Sara Hassan recommended: “Dual-authorisation workflows and real-time dashboards prevent recurrence.” Training gaps surface too; CTM now mandates annual certifications.
Regulatory agility shines: SECP’s 10-day clearance post-plan submission. As per Dawn columnist Omar Quraishi: “This balances penalty with business continuity, fostering compliance culture.”
Investor education gains traction. PSX CEO Farrukh Khan urged: “Retail investors must scrutinise audit qualifications.”
How Will CTM Rebuild Stakeholder Trust?
CTM launched a “Trust 2026” initiative: bi-monthly webcasts, third-party verifications. Ayesha Khan pledged: “Independent audits by EY from FY2026.”
CSR commitments include PKR 20 million for Punjab school digitisation, partnering Ministry of Education. Community outreach targets Lahore’s SMEs.
Digital Marketing strategies amplify transparency via LinkedIn and PSX portals.
What Lies Ahead for CTM?
Analysts forecast 15% revenue growth in FY2026, driven by government e-archiving tenders. Fahad Bilal of AKD predicts: “PKR 3.5 billion topline feasible post-restatement.”
Challenges persist: ERP migration risks, talent retention amid PSX scrutiny. Yet, CTM’s 500-strong workforce and blue-chip clients (SBP, FBR) fortify prospects.
In Lahore’s bustling corporate landscape, CTM exemplifies resilience. For professionals eyeing finance careers, mastering these dynamics through targeted Accounting & Finance programmes equips one to navigate such complexities adeptly.