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Saturday, July 20, 2013
SECP’s ex-chief writes to PM against ‘influential looters’* Muhammad Ali says owners of a powerful media group, a brokerage house wanted SECP to issue letters of their choice to SBP regarding proposed acquisition of HSBC by JS Bank
Staff Report
KARACHI: A powerful media group and a brokerage house of the country, the Jahangir Siddiqui Group (JS Group), are trying to overcome Pakistan’s regulators, said Muhammad Ali, the sacked chairman of the Securities and Exchange Commission of Pakistan (SECP), in a letter to Prime Minister Nawaz Sharif.
Ali, who was removed from the post a few months ago, alleged that a large media group, with the connivance of a brokerage house, had been looting billions of rupees of the nation and trying to control regulatory bodies as well as different law enforcement agencies by using corrupt means to ensure that they hold regulators, the government and law enforcement agencies hostage.
In the letter to the prime minister, the former SECP chief said that pressure tactics, harassment and blackmailing never stopped in relation to cases involving the owner of a powerful brokerage house and his close relative, who happens to be the owner of the most powerful media empire in the country. The primary case was that of the Azgard Nine Limited (ANL), in which various companies of a renowned brokerage house had manipulated the share price of ANL at the Karachi Stock Exchange (KSE), and induced innocent investors into buying shares with no substantial financial backing, causing losses worth billions of rupees to not only innocent investors but also financial institutions, he said in the letter. Muhammad Ali was sacked by the Supreme Court over a dispute on the procedure adopted by the previous government for his appointment.
“There was tremendous pressure on me not to file the case, but I chose not to succumb to the pressure... and the commission filed the criminal complaint (242),” the former SECP chief said.
He said that besides the ANL case, “they wanted the SECP to issue letters of their choice to the State Bank of Pakistan (SBP) in the matter of proposed acquisition of the HSBC by JS Bank”.
When the public was defrauded by the front running in the sale transaction of shares of the Pakistan International Container Terminal by a Swiss private bank, the SECP froze the said shares until the identity of the actual buyer was disclosed by Swiss authorities, he said.
Ali also informed that prime minister that despite tremendous pressure and threats, he did not kneel to their demands of closing the inquiry.
He further said that pressure tactics included various phone calls and meetings involving some high-profile business tycoons, which he “tried to manage in the most diplomatic manner possible. However, the pressure did not ease off”.
“I repeatedly assured them that no injustice would be done and that the commission would ensure that no one would be proceeded against unless there was concrete and cogent evidence against them to support a criminal prosecution, but that those who had violated the law would be tried.” He alleged in the letter that the owner of a powerful media group continued to threaten him, saying that “he would tarnish my reputation and image in the media, and that he would use his influence in the law enforcement agencies against me”. “The submission of misleading information to NAB in the OGRA case, trying to falsely implicate me and the SECP commissioner responsible for filing the ANL case, by an employee of the SECP who is suspected to be close to this group, is just one example of their actions,” he said in the letter.
The former chief said that in the past, the SECP had rarely looked into frauds committed by powerful corporate groups. He said that as part of his strategy of strengthening the regulator and taking action against fraudulent activities, the commission was in the process of initiating inquiries against various business groups for causing losses amounting to billions of rupees (in tax evasion) to national exchequer. “The oil and gas, IPP and media sectors were already being looked into, and some companies of the media [group] owner were also on the SECP’s radar.”
The sacked regulator said that the recent decisions and actions by the SECP also proved the fact that they (the owners of the media group and the brokerage house) had succeeded in influencing the regulator to their advantage, including the misstatement and concealment of facts before the SECP Policy Board; submission of a report in the Supreme Court that suited their interest; lack of action in response to the stay obtained from the Sindh High Court against criminal proceedings in the ANL case; no progress on the strategy to look into groups who have committed frauds; and stoppage of inquiries that were decided before his (Ali’s) removal, including the inquiry into share price manipulation in the case of the JSCL.
He said that despite his removal from the SECP, they (the accused) did not stop the harassment.
“They are continuously planting false news in the media against myself, fearing that my return to the SECP might lead them to face a tough and honest regulator once again.” He said in the letter that the matter had not ended, since those “powerful people” had now managed to get his name placed in the Exit Control List (ECL), despite the fact that no case, inquiry or investigation was being carried out against him. In the letter, he suggested that a commission may be constituted to look into under-question and other similar incidents for initiation an appropriate legal action against the culprits, and to recommend actions which may include proposals for setting up of a regulatory body to oversee the print media, strengthening of PEMRA for avoidance of false reporting in the electronic media, etc.
Courtesy www.dailytimes.com.pk