ISLAMABAD The National Assembly Standing Committee on Finance has formed a sub-committee to re-investigate stock market fiasco, which caused a loss of over Rs780 billion in March 2005 to a large number of small investors.

The committee met here on Tuesday in the Parliament House with MNA Fauzia Wahab in the chair.

The decision came in the wake of a demand placed by a majority of the members of the committee, especially Kashmala Tariq as she was of the view that 95 per cent of the investigation has already been completed, and it should be completed so that nation could know as to who were the main beneficiaries of this crisis.

Kashmala informed the committee that some 100 million rupees have already been spent on forensic investigation by a foreign company and the issue needs to be sorted out in detail. Agreeing to the demand, the chairperson of the committee, Fauzia Wahab, constituted the sub-committee to re-open the stock market crash investigation.

The five-member committee is headed by MNA Aftab Shaban Mirani while the other members include Kashmala Tariq, Khawaja Asif, Rashid Godil and Riaz Fatiana.

The 2005 stocks crash had raised many questions on role of the regulator, the Securities and Exchange Commission of Pakistan (SECP) and the management of Karachi Stock Exchange (KSE).

In 2006, the government had hired a US firm, Diligence Intelligence and Risk Management, to investigate the stock exchange fraud and paid a hefty amount of $10,638 per page for the report to the firm.

The report by the US firm was presented before the National Assembly Standing Committee on Finance in November 2006 which identified 88 brokerage houses that took positions over and above Rs50 million in the futures market, but it did not held them responsible.

The government has issued show-cause notices to these 88 brokers to fulfill the legal requirements.