Sher Baz Khan

ISLAMABAD, March 12: The Securities and Exchange Commission of Pakistan (SECP) said on Wednesday it will take ‘appropriate’ action against those responsible for making a controversial error in disclosure of financial figures of NIB Bank Ltd for the year ended on December 31, 2007.

The bank had replaced within a space of 10 days, the earlier declared huge profit with a big loss, which is believed to have inflated and then deflated the bank’s stock price.

The commission had served a notice on the bank management after considering that the error could have tempted investors to buy the bank’s shares believing on the first declared huge earnings.

The bank on Wednesday provided details of the error that caused misstatement in consolidated financial results for the year ended ob December 31, 2007 to the SECP.

The commission, however, did not disclose the details of the bank’s viewpoint. A spokesman for the SECP said: “The commission is closely reviewing the issue and appropriate action will be taken against those responsible for such errors in consolidated financial results of the bank”.

The Karachi Stock Exchange (KSE) has already written a letter to the bank management seeking explanation for the misstatement.

According to the KSE officials, the bank had communicated the ‘stand-alone and consolidated’ financial figures for 2007 on February 27 posting profit after tax (PAT) at Rs480.86 million.

However, 10 days later, the bank passed on another sheet of paper to the KSE showing that it had actually incurred loss after tax amounting to Rs111.49 million.

The bank cited ‘oversight’ as the reason for the earlier erroneous communication of results and said that a subsequent review had revealed the actual numbers.