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| July 27, 2005 | Wednesday | Jumadi-us-Sani 19, 1426 |
KSE crash victims want manipulators punished
ISLAMABAD, July 26: Affected investors of the March Karachi Stock Exchange crash in the civil and military bureaucracy have started mounting pressure on the government to divulge the names of individuals identified by a task force as being involved in manipulation of the crash and to take punitive action against them, senior officials disclosed.
A large number of serving and retired bureaucrats had invested heavily in the stock market. The crash is estimated to have caused a loss of Rs600 billion.
The task force constituted by the government to investigate the crash had submitted a
two-part report, giving the reasons for the crash and identifying 15 individuals and institutions that played pivotal role in the crash.
Although the government, the officials said, had time and again stated that those involved would be taken to task, apprehensions still exist that the issue may be pushed under the carpet due to strong connections of some of those involved.
The disclosure of the names of those involved, the officials believe, would purge the stock exchange business of the “black sheep” that have been manipulating the market through inside trading, benami accounts, taking position in other brokerage houses besides owning cartel of brokerage houses and checking other’s positions in the market.
“The government would have to take bold and imaginative decisions,” a senior official said.
Some of the desperate affected officials have even threatened to leak the report in case the government keeps it secret, it has been learnt.
The government officials are insisting that those involved should be heavily fined.
Although, they don’t expect to recover their losses, they are promoting the idea of using money pooled through fines for margin financing on pro rata basis.
The banks, they contended, have committed Rs19 billion for replacing ‘Badla’ financing with margin financing, whereas the government can pool upto Rs100 billion through imposing fines on those found responsible for engineering the crash.
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