‘SECP must protect itself from outside interventions’

Updated September 29, 2019

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Securities and Exchange Policy Board Chairman Dr Khalid Mirza on Saturday took note of “unwarranted, and possibly illegal, intervention by outside forces and harassment as well intimidation by staff of other federal agencies which had debilitated the Commission”. — Reuters/File
Securities and Exchange Policy Board Chairman Dr Khalid Mirza on Saturday took note of “unwarranted, and possibly illegal, intervention by outside forces and harassment as well intimidation by staff of other federal agencies which had debilitated the Commission”. — Reuters/File

ISLAMABAD: Securities and Exchange Policy Board Chairman Dr Khalid Mirza on Saturday took note of “unwarranted, and possibly illegal, intervention by outside forces and harassment as well intimidation by staff of other federal agencies which had debilitated the Commission.”

It also called on the commission to “objectively determine” through its own internal procedures, “the factual position regarding the charges being faced by certain staff members that had been implicated, or were likely to be implicated, in legal cases.”

In those cases where required, the Policy Board also called on the Commission “to stand up and defend these staff members in all forums.”

There are eight staff members of the SECP currently either in custody or otherwise the subject of investigations by the National Accou­ntability Bureau (NAB).

Two commissioners, Tahir Mahmood and Shaukat Hussain, are facing an inquiry over Summit Bank case in the former and the latter over his own appointment. Mahmood has been placed on the Exit Control List (ECL) by the bureau.Three Executive Directors of the Commission are also facing NAB inquiries with two on the ECL.

Commission told to ‘stand up and defend’ staff members from NAB action where required

One Registrar of Companies, Javed Hussain, is in NAB custody since end August in Park Lane case, for allegedly “facilitating the resignation of former President Asif Ali Zardari from two companies when he was President”. One deputy registrar from the Karachi office and another from Lahore are also facing inquiries.

It also called for “withdrawal of cases wrongfully referred to law enforcement agencies and repatriation of staff seconded to these agencies”, something the board had directed earlier as well. The Policy Board was referring to the SECP employee currently posted in NAB to assist the various JITs.

The Policy Board also drew the attention of the Commission to “several stock market related governance issues that needed to be redressed.”

The policy board also approved creation of Adjudication Division in SECP, which will be a quasi judicial arm of Commission and entrusted the responsibility for its entire adjudication work pertaining all regulated entities and persons instead of the existing practice of adjudication being carried out separately by various departments/divisions within the Commission.

The centralisation of adjudication is expected to enhance the effectiveness of the Commission, ensure fair and consistent decisions, and minimise any creeping risk of arbitrariness in the discharge of its judicial function.

The Policy Board also took up the matter of SRO 1048 (I)/2019 dated Sept 11 requiring companies to file a tax compliance certificate. It considered this order to be ultra vires and beyond the jurisdiction of the SECP and has directed the Commission to take steps for its withdrawal after taking legal advice.

The SECP’s financial statements for the year ended June 30, 2019 were presented to the Policy Board and approved. The Commission’s Annual Report will be finalised after the Members of the Policy Board have reviewed it and provide their observations.

Published in Dawn, September 29th, 2019