LAHORE, Nov 23: Describing the Hubco fiasco at the Karachi Stock Exchange (KSE) as a crime, the chairman, Securities & Exchange Commission of Pakistan (SECP), Khalid M Mirza, says the Commission will hold an independent probe into the matter to “strengthen the system of verification of such information before it is released to brokers and investors to avert similar incidents in future”.

Speaking to reporters after the launch of the Internet Trading System at the Lahore Stock Exchange (LSE) here on Friday, he said the KSE had already constituted an inquiry into the matter on the SECP direction. He said the SECP investigations would draw on the results of the KSE probe for a “broader purpose of preventing any such fiasco in future”. “We (SECP) would certainly look into this particular incident as well,” he stated. Moreover, the SECP probe would also focus on action to be taken against those found guilty by the KSE.

The KSE had received a fax message from Hubco, announcing that its foreign lenders had agreed to allow the dividend declared for its shareholders. The information was immediately put out for the benefit of brokers and investors who took positions accordingly.

However, the very next day, only a few minutes after the start of trading, Hubco denied having sent such message to the KSE that led the stock exchange management to suspend trading in the scrip to resolve the matter and fix responsibility.

“It was a common knowledge that Hubco would give dividend this year. Had the information sent through the fake message been sudden, the unsuspecting investors and brokers would have lost a lot more (money than they did),” Mirza said.

He also gave details of the SECP efforts to make the listed companies publish their audited annual accounts in four months of their year end as well as make them issue quarterly, unaudited accounts for the information and benefit of the investors. He said the companies were resisting these directions on flimsy excuses.