ISLAMABAD, July 7: Former chairman of the Securities and Exchange Commission of Pakistan (SECP) Dr Tariq Hassan on Friday issued a ‘white paper’ on the March 2005 stock exchange crash, and claimed he had reached close to a ‘few big fish” when he was shown the door.
“The last orders on my table, when I was removed from my post on Eid day, was the appointment of forensic investigators to probe the few big brokers held responsible by the task force (for the crash),” Mr Hassan told reporters after presenting the so-called white paper to the National Assembly’s Standing Committee on Finance and Revenue.
The committee at its meeting, presided over by Chaudhry Anwar Ali Cheema, ordered the appointment of another team of forensic investigators to probe reports about involvement of 11 high-profile brokers in the Karachi Stock Exchange crash.
The team will be presenting its report to the committee within 10-12 weeks after which those found responsible might be brought to book. Their names are also likely to be put on the Exit Control List.
“They (the government) have no other option but to continue with the reforms I had initiated but was not allowed to complete. The moral pressure on them is building and compelling them to get hold of the big fish. Otherwise, I fear form will prevail over substance,” said Mr Hassan while commenting on the committee’s decision to proceed with the probe.
MNAs from the ruling party and opposition quoted Mr Hassan as saying in the meeting that he would never retreat from his stand that he had not been allowed to go ahead with reforms.
The former SECP chairman asked how could he get hold of those powerful brokers who, he alleged, had access to the prime minister.
During the nine-hour meeting, Dr Hassan faced tough questions from the Minister of State for Finance Omar Ayub Khan and Prime Minister’s Adviser Dr Salman Shah, apparently because he had mentioned their names in letters he had sent to the prime minister and accused them of pressurising him not to replace Carry-over Transaction with margin financing, one of the main causes of the crash.
When Dr Hassan was busy answering journalists’ questions after the meeting in the committee room, a government official approached him and asked him to leave as Dr Salman Shah, Omar Ayub and incumbent SECP chairman Raziur Rehman were to hold a news conference.
“Dear, you people have invited me to this meeting,” said Dr Hassan to the official while leaving the room.
Ruling party MNA Kashmala Tariq told reporters that there was a threat to Dr Hassan’s life because he had taken on some powerful people.
For the first 50 minutes of the meeting, Dr Hassan was not allowed to speak and it was only after a protest by opposition MNAs that he was given an opportunity to do so.
Starting his presentation, Dr Hassan quoted from Shakespeare’s Julius Caesar: “The fault, dear Brutus, is not in our stars, but in ourselves that we are underlings.”
SECP chairman Raziur Rehman was asked by Dr Hassan and Ms Tariq why had the reform process had been stopped and why task force’s recommendations had not been implemented, which resulted in another market crash.
Insiders told Dawn that at one point Mr Omar Ayub said he had taken strong exception to Ms Tariq’s remarks when she said “our prime minister also intervenes in our stock market”. Ms Tariq was replying to Mr Omar Ayub’s comment that even the US president had intervened in the stock market on various occasions.
Former KSE chairman Yasin Lakhani and Aqeel Karim Dhedi (AKD) were present on the occasion.
OPPOSITION’S DEMAND: Members of the committee from the opposition, Mujeeb Pirzada, Mohammad Laeeque Khan, Qurban Ali Shah, Khalid Iqbal Memon and Sardar Ayaz Sadiq, at a separate press conference later, said the government was responsible also for the market crash of May 2006.
They said the fresh crash took place because no action had been taken against the influential brokers involved in the March 2005 crash.
The members demanded resignation of the prime minister for his alleged intervention in the stock market affairs and links with some brokers, first stopping the SECP chairman from taking action against manipulators and then sending him home when he initiated reforms.
“During Shaukat Aziz’s era, first as the finance minister and later as the prime minister, the country’s stock market has crashed in 2000, 2001, 2002, 2005 and May 2006. Therefore, we demand resignation of the prime minister,” Mr Pirzada said.
They said the committee had decided that the stock market reform process must go on.