LAHORE, Nov 7: The Securities and Exchange Commission of Pakistan (SECP) has withdrawn its nomination of Lahore Stock Exchange (LSE) chairman Hamesh Khan as member of the bourse’s board of directors less than two months ahead of expiry of the board’s term.
SECP chairman Razi-ur-Rehman told Dawn on Wednesday by telephone that Hamesh had been withdrawn from the LSE board because it was not functioning “amicably” under his chairmanship.
But some elected directors alleged that the nomination of Hamesh, who is also president of Bank of Punjab, has been withdrawn to pave the way for the election of Ibrar Mumtaz, a close friend of Prime Minister Shaukat Aziz, in his place.
Asim Zafar, an elected director and a former chairman of the LSE, described the withdrawal of Hamesh less than two months before the expiry of the term of the existing board as uncalled for and an indecent act.
“The SECP could and should have waited for another couple of months. If it has to be done, it should have been done soon after the election of the board’s new chairman,” he said. However, he said, it is the prerogative of the SECP to nominate or withdraw its nomination(s) any time.
Hamesh was elected in January as chairman of the LSE board by the five elected directors against the wishes of the SECP as its chief Razi wanted them to elect Ibrar. Under the law, the board can elect its chairman only from among the four outside directors nominated on the board by the regulator.
After failing to get the post, Ibrar had resigned as director of the LSE, but was re-nominated in July. But he did not attend any board meeting during July-September, which created a casual vacancy on October 11.
In order to force Hamesh to resign as chairman of the LSE board and support Ibrar’s election in his place, the SECP did approve appointment of the bourse’s new managing director in spite of the fact that the selection was finalised in June. The incumbent managing director’s contract expired on June 14 and he has since been working on ad hoc basis till the appointment of his successor. The SECP did not take a step on the issue despite letters sent to it pointing that it was affecting the working of the exchange.
It is widely been alleged by the LSE brokers that the SECP is now putting pressure on the board to elect Ibrar as its chairman for the remainder of its term. Razi, nonetheless, denied the charge.
Razi defended Ibrar’s absence from the board meetings and said he was never informed about the meetings well in time. He said the election of Ibrar or any other nominated director as Hamesh’s successor depended on the will of the board.
A broker, who did not give his name, said the elected members had conveyed to the SECP chairman that they will not accept Ibrar as chairman of the board.
Some elected directors rebutted the charges levelled by the SECP chairman that the board was not functioning properly under the chairmanship of Hamesh. “The board has regularly held its meetings since its constitution and election of its chairman. In 10 months it has held 11 meetings.
Besides, a lot of work was completed on demutualisation of the exchange and a proposal in the regard was already lying with the SECP for its decision.
“The existing board has accomplished a lot of work in the last 10 months despite a hostile and uncooperative attitude of the SECP and its chief,” an elected director, who asked not to be named, said.
