KARACHI: While there is the investors’ run on stock brokerage ACE Securities, the nest is empty.
According to the market sources, ACE Securities Chief Executive Officer Haroon Iqbal appears to have fled the country with investors’ Rs350 million.
In a familiar phenomenon of deceit which in stock exchange parlance is termed “Dabba chalana”, the brokerage house is said to have defrauded sub-account holders; the worst-affected are the small investors who do not have an account with the Central Depository System (CDS).
The orders placed for buy and sell by the clients were not executed by the brokerage firm and the money just found its way into the brokers’ own accounts.
The panic was in the air for quite some time, but the regulators decided to keep things under a cloak of secrecy and silence. It was only on Monday that the market monitors moved to suspend the brokerage house operations.
A notice issued by the KSE’s Chief Regulatory Officer stated: “We regret to note that ACE Securities has not given/taken any response/action within the given notice time, therefore in exercise of powers vested upon me under the KSE regulations, I have suspended operations of all trading terminals of ACE Securities before opening of regular market on April 27 (Monday) till further notice”.
The notice refers to a previous notice “on their apparent violations/non-compliance of KSE regulations”. The bourse threatened to place the matter before the KSE Board and take further disciplinary action in the event of non-compliance in the matter.
It is only when the regulators make a clean breast of things that the nervous investors at the market would get the accurate information about the unsavory events.
“The suspension of operations of all trading terminals of the brokerage house means that my stocks and money with the brokerage are stuck,” lamented one client among the crowd gathered outside the ACE Securities registered office at Marine Drive, Clifton Block-2.
There are number of questions that are being raised: how did the long running unfair practice at the brokerage escape the eyes of the apex and frontline regulators; how much is the ‘in-house’ badla in the market; are the regulators unaware of this illegal activity; and finally does the bourse hold enough sum in the ‘Investors’ Protection Fund’ to satisfy the claims of all the beleaguered clients?
Published in Dawn, April 28th, 2015
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