ISLAMABAD, July 9: The government has directed the Securities and Exchange Commission of Pakistan (SECP) to prepare a charge-sheet against its former chief Dr Tariq Hassan for his failure to avert the March 2005 stock market crash.
“SECP Chairman Raziur Rehman has been asked by the government to prepare a charge-sheet against Dr Hassan, containing technical details and information available with the SECP on market manipulations by brokers days before the Karachi Stock Exchange crash,” a source told Dawn on Sunday.
The charge-sheet would also contain (proofs of) lack of decision-making power that afflicted the SECP when the market was being manipulated and air was being pumped into the stock market transactions, amid statements of appreciation issued in media by some government advisers and politicians, he added.
Officials said that although Mr Hassan was of the view that legal barriers and powerful brokers had turned the commission into a toothless bulldog, the fact was that it was already too late when the SECP took action.
They said that it was not clear if the charge-sheet would contain names of some SECP officials believed to have had links with brokers.
Meanwhile, in a surprise move, the SECP has awarded the additional charge of commissioner of securities market division to Rashid A. Malik, a commissioner from its company law division, who apparently has not been in the picture as far as the ongoing stock market issues are concerned.
Some officials said that the corporate watchdog appeared to be running out of human fuel.
They said that the commission was short of at least three commissioners and three executive directors, in sharp contrast to the Securities and Exchange Commission of Pakistan Act 1997 requirements of at least five commissioners.
Soon after the market crash, commissioner of the securities market division, Shahid Ghaffar, resigned and his post was taken over by the then SECP chief Dr Hassan. After the latter’s removal, the post was taken over by the incumbent SECP chief Raziur Rehman.
Now, the officials said, additional charge of the post had been given to the commissioner company law division, which was different than the securities market division.
The demands of the two divisions are different and they need people with different expertise.
The move, they said, had been taken at a time when the SECP was facing a host of challenges, including the appointment of forensic investigators to probe into the involvement of some big fish in the market collapse, the audit of share transactions with the help of Korean experts to determine the extent of manipulation, the wash trade and short-selling during March 2005 and the process of introduction of reforms halted by the departure of Dr Hassan.
The commission has to implement the measures within a short span of three to six months as directed by the National Assembly’s standing committee on finance and revenue. According to the officials, the job seemed to be difficult keeping in view the lack of workforce in the commission.
Ironically, they said, though Dr Hassan was shown the door six months ago, he still held the post of a commissioner in the SECP but never attended the office.
They said that the term of Dr Hassan as commissioner would end in August, which would make SECP deficient of yet another commissioner.
Insiders told Dawn that Mr Rehman had awarded the additional charge of the securities market division to the commissioner of law division as he was said to have received a handsome job offer from a private bank.
