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ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) on Tuesday directed Pakistan Stock Exchange Ltd (PSX) to immediately remove Hussain Lawai as chairman of its board of directors.

The SECP had earlier issued the direction considering facts that the first information report (FIR) dated July 6, has been registered by the Federal Investigation Agency (FIA) under Pakistan Penal Code read with Prevention of Corruption Act 1947 and the Anti-Money Laundering Act 2010.

The said FIR, among other individuals, also nominated Lawai as one of the accused, and the FIA has arrested him for further investigation.

In the interest of the public and the capital markets, the SECP has directed PSX to remove Lawai and appoint a new chairman of the board, while ensuring compliance with the regulatory requirements.

Earlier, the PSX board meeting held on Monday had expressed confidence in Lawai on the grounds that he was not convicted under any charges.

He became chairman of the demutualised PSX on May 15. Earlier on May 9 he was appointed as one of the seven independent directors by the SECP but even at that time there were certain controversies attached with him.

Two conditions were attached with the appointment of Mr Lawai. First, in case the sale of Summit Capital (Pvt) Ltd was not materialised by August 31, 2018, he will resign either from the PSX board or from the board of Summit Bank.

The second condition was that Lawai will refrain from being part of any proceeding of PSX board regard any issue pertaining to Summit Capital (Pvt) Ltd, and will ensure independent business judgement without being subservient to any form of conflict of interest.

However, a new situation too has surfaced after his removal as chairman of the board and that he will also not be a director at the PSX board.

Meanwhile, an official of the SECP referred to section 161 of Companies Law 2017 that relates to filling of seat vacated due to any reason before the expiry of the term.

The section 161 (2) is – ‘Any casual vacancy occurring among the directors may be filled up

by the directors and the person so appointed shall hold office for the remainder of the term of the director in whose place he is appointed’.

“The PSX board members can appoint any reasonable person to fill in as the new director and in the next step board will appoint a next chairman, but the person has to fulfil the fit and proper criteria, ” the official added.

Published in Dawn, July 11th, 2018