ISLAMABAD, Dec 13: The National Assembly’s Standing Committee on Finance was informed here on Wednesday that Diligence, which conducted investigations into the March 2005 stock market crash, was in fact a consultancy firm and had nothing to do with forensic probes.
Committee member and ruling party MNA Kashmala Tariq told the committee that she had confirmed it from the US Embassy that the US-based Diligence was just a consultancy firm and did not have the mandate to conduct forensic probes.
She said that the Securities and Exchange Commission of Pakistan had paid over Rs61 million to the firm in order to make it come up with the results and “findings as desired by the government”. Ms Tariq said that it was not an ordinary issue and must be investigated in order to know the real faces behind the capital market crash.
Committee chairman Chaudhry Anwar Ali Cheema said that SECP chairman Razi-ur-Rehman would be asked to explain the situation when he briefs the committee on Thursday about Crescent Standard Investment Bank (CSIB).
Minister of State for Finance Omar Ayub Khan said that former SECP chairman Dr Tariq Hassan had appointed Diligence and when Mr Razi-ur-Rehman took over he had to go ahead with the same firm.
“If the SECP had appointed another firm, even then there would have been allegations that the new chairman diverted from the process (of investigations) initiated by Dr Tariq Hassan,” the state minister observed.
He said that Diligence had an international reputation and conducted probe into the scam of the oil-for-food programme in Iraq.
In its last meeting, some members of the standing committee had also criticised the appointment of Diligence without issuing any tender by the SECP. Dr Tariq Hassan had termed the forensic report on the KSE crash `justice for the rich’.
“The State Bank of Pakistan will take action within 24 hours if the SECP informs us that Taurus Securities Ltd is proven guilty (in the stock market crash),” said SBP Governor Shamshad Akhtar.
Ms Tariq had asked the governor whether the SBP had taken any action against Taurus Securities as it had been found involved by the forensic probe in breaking the SECP laws in futures contracts. It was one of the 88 securities firms against which there were prima facie evidences gathered by the forensic probe.
She said that Taurus Securities was 100 per cent owned by NBP, which was regulated by the SBP. However, the SBP governor said that she could take any action only after the SECP notified to it.
