ISLAMABAD, July 8: The National Assembly’s Standing Committee on Finance and Revenue on Saturday recommended that the penalty imposed by the Securities and Exchange Commission of Pakistan (SECP) on people committing fraud in the stock market be increased from Rs25,000 to Rs10 million.

According to an official announcement issued at the end of the two-day meeting on the March 2005 stock market crash, the committee directed the ministry of finance and the SECP that a final report should be submitted to the standing committee within three months after forensic audit of transactions.

The ministry and the SECP were asked to fix responsibility for appropriate action against those found involved in the crash.

Some members of the committee criticised the recommendations, saying the handout had been issued by the chairman and some high-ups of the ministry on their own.

“They had not discussed the increase in penalty amount at the meeting. I wonder why they are reluctant to take us into confidence on such an important issue,” a member said.

Insiders quoted Shaukat Tareen, president of the Union Bank who had headed a State Bank-SECP committee on carry-over transaction, as saying at the meeting that although the Badla mode of financing had been abolished in many countries for being one of the main factors in the market crash, it was still in force in Pakistan and was unavoidable.

The sources said that on Friday former SECP chairman Dr Tariq Hassan had read out the three letters he had sent to the prime minister after the market crash. In one of the letters he said he was being removed because “he had failed to keep good relations with the brokers”.

Meanwhile, opposition members criticised standing committee chairman Chaudhry Anwar Ali Cheema for debarring journalists from covering the meeting.

They accused the chairman of violating rules 207 and 208/3 of the Rules and Procedures of the National Assembly by banning journalists from the meeting.

Some members exchanged harsh words after which the opposition members walked out of the meeting, delaying the proceedings for half an hour.

Opposition members said that journalists could not be prevented from covering meetings on issues of public interest. They were of the view that small investors had suffered a loss of over $13 billion in the market crash and people had the right to be informed about the outcome of the meeting.

The chairman reportedly said he was empowered to ban or allow anyone to the meeting. However, opposition members said he had violated rules not only by banning reporters but also by inviting 10 special observers (MNAs) without consulting the committee members.

The committee was briefed by Dr Salman Shah, Adviser to Prime Minister on Finance, Minister of State for Finance Omar Ayub Khan and the SECP chairman on the market crash.

FARM LOAN: According to the official announcement, the committee recommended that no interest be charged by the Zarai Taraqiati Bank on farm loans between Rs200,000 and Rs500,000 in the drought-hit areas of southern Punjab.