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01 BUSINESS B Friday, 24 May, 2013 INSIDER TRADING AT EQUITY MARKET ( ( KARACHI ISMAIL DILAWAR The Securities and Exchange Commission of Pakistan (SECP) sided with at least 15 enti- ties declared as “guilty” by SECP investiga- tors for insider trading in the shares of Azgard Nine Limited (ANL) during April 2007-2008 at Karachi Stock Exchange (KSE) by not naming them in the criminal complaint filed with the court. When con- tacted, SECP officials clarified that the 15 ac- cused were left out of the case for the want of “strong evidence” that could substantiate the investigators’ findings against them. The apex regulator is alleged to have favoured at least 15 organisations and/or in- dividuals by removing their names from a re- cent criminal complaint the commission filed, on 17th April, in the Court of Session Judge Karachi (South) against a group of 23 persons, including some high profile corpo- rate individuals, for manipulating the listed shares of ANL. Interestingly, one of the regulator’s 15 al- leged blue-eyed personnel was appointed as an SECP commissioner in August 2012. The allegations came from Transparency International-Pakistan (TI-P) that claimed to have received complaints against the SECP as well as other parties allegedly involved in the 2008 brokerage house scam. “SECP in the criminal complaint… has excluded 15 companies and individuals reportedly in- volved in the inside(r) share trading of Az- gard (Nine) in the SECP investigation report,” observed TI-P in a letter it dispatched to the commission on May 9. The said inquiry report was filed by SECP investigators on April 15, 2009, ac- cording to the TI-P letter, a copy of which is available with Pakistan Today. The 15 names not included by the SECP in its criminal complaint are: Crosby Dragon Fund, Jahangir Siddiqui Bank Limited, JS Aggressive Asset Allocation Fund, JS In- come Fund, JS Capital Protected Fund, JS Capital Protected Fund II, JS Growth Fund, Begum Aftab Khatri, Zaibunnisa, Muham- mad Ibrahim, Mashooq Ali Kalyar, Rubin Malkani, Khalid Rafi, Rashid Siddiqui and Muhammad Asif Mendha. The TI-P, in its letter to SECP acting Chairman Tahir Mahmood, said the commis- sion had removed the name of Zafar Abdul- lah, CEO of Crosby Dragon Fund, as an accused in the ANL scam. “Mr Zafar Abdul- lah was appointed as SECP commissioner on 17th August 2012,” the TI-P letter recalled. Further, the TI-P said after April 2008, Term Finance Certificates (TFC) of ANL were sold to the Evacuee Trust by the JS Group at approximately Rs 1 billion, four times the market rate. Moreover, the anti-cor- ruption watchdog said last year on February 24, JS Growth Fund and JS Large Capital Fund had sold over 1.606 million shares of Pakistan International Container Terminal (PICT) at Rs 101.59 to Bank Julius Baer & Company of Switzerland. The Swiss bank in fact had bought the PICT shares for the JS Group, claimed the TI-P. “JSCL had a commercial re- lationship with them,” it added. “The above allega- tions are against (the) SECP itself, for not filing criminal case against 15 en- tities who have been proven guilty of insider trading in the 2008 SECP investigation report,” Transparency Interna- tional said. The TI-P asked the SECP to authenticate the complaints regarding trading of ANL’s TFCs at four times the market price. In addi- tion, it wants the regulator to probe into the sale of PICT shares by the Bank Julius Baer & Company “if it has not already taken no- tice of these two issues”. The commission, the letter suggested, may contact the Evacuee Trust Property Board, Government of Pak- istan and Bank Julius to find out the client for whom they had purchased the PICT shares. “Transparency Interna- tional-Pakistan requests to examine the complaint and beside criminal ac- tion which would be taken by the court, also re- quests action under the SECP Law and Compa- nies Ordinance 1984,” reads the TI-P letter under- signed by Executive Director Saad Rashid. The SECP is said to have responded to the allegations through a letter to the TI-P on Tuesday. “The investigators do a sort of fact-find- ing job that is largely based on happenings of the case,” said an SECP official requesting anonymity as he was not supposed to com- ment on the issue officially. The names of 15 entities, the official said, were excluded from the commission’s criminal complaint for lack of strong evidence that could substantiate SECP’s plea in the court. “You need strong evidence when you finalise the list of ac- cused,” explained the official. On April 17, the SECP had filed a crim- inal complaint against a group of 23 per- sons/entities including brokerage houses, investment companies and individuals from renowned business families. The institutional accused in the complaint included JS Global Capital Limited, Jahangir Siddiqui and Com- pany Limited, Jahangir Siddiqui & Sons Limited, Jahangir Siddiqui Securities Serv- ices Limited, JS Investment Limited and Aziz Fida Hussain and Company Limited. While the individuals nominated were Saad Saeed Farooqui, Mehboob Ali Kalyar, Muhammad Sadiq Patni, Syed Nizam Shah, Humayun Shaikh, Alia Sheraz Monoo, Amna Humayun Shaikh, Nasreen Shaikh, Ahmed Shaikh, Muhammad Riaz, Muham- mad Ijaz, Irfan Aziz, Saba Irfan Aziz, Zehra Nazim Aziz, Mohammad Iqbal and Muham- mad Mubashir Hameed Dagia. SECP leaves out names of 15 ‘guilty’ entities from criminal complaint TIP WRITES TO SECP REQUESTING ACTION AGAINST ALLEGED IRREGULARITY KARACHI ISMAIL DILAWAR T ERMING the pro- posed mini budget as a “drone attack” on the already troubled trade and industry, traders and industri- alists the country’s financial hub said the interim government has no mandate to introduce a budget. Calling upon the Federal Board of Revenue (FBR) to call a round-table meeting with all concerned stakehold- ers present, almost all major represen- tative bodies of the business community warned of disastrous con- sequences for the ailing economy, par- ticularly exports and remittances, if the proposal materialised. The caretaker federal government is reported to have introduced a mini budget worth Rs 152 billion through promulgating a presidential ordinance. The interim fiscal document, however, is awaiting President Zardari’s nod which, according to Presidential Spokesman Senator Farhatullah Babar, has so far not been given. Dubbing the FBR as an “enemy” of Pakistan, traders and industrialists said the board was further burdening tax- payers only to increase what KCCI President Haroon Agar said was its “unofficial income”. “First of all, it is not the caretakers’ mandate to introduce a budget,” claimed the KCCI president who along with M Zubair Motiwala and other of- fice bearers of the chamber is slated to address a briefing on Friday (today) at the KCCI on the mini budget. Further, Agar said much of the pro- posed taxes in the mini budget were of a re- fundable nature. “Almost all of the taxes in the Rs 152 billion budget are to be refunded later, so this budget would serve no purpose but open up a window of cor- ruption,” the KCCI chairman said while talking to Pakistan Today. Moreover, he said the FBR in- stead of broadening the existing below-10-percent tax-to-GDP ratio, was imposing more taxes on the tax- payers only to cushion its low tax col- lection. “We demand that the elected government decide these issues in the federal budget,” Agar said, warning that the move would adversely impact the government’s $ 90 billion three- year exports target. Slamming the caretaker govern- ment for “exceeding its mandate”, FPCCI President Zubair Ahmed Malik said it was unacceptable. “Whatever they plan to do should be in the federal budget and by the elected government,” he said. Linking the proposed mini budget to the credibility of next PML-N-led government, Malik said Khwaja Asif, a PML-N stalwart known for moving courts on national issues, would also have to question the introduction of this caretaker-backed budget in the manner he challenged appointments by the in- terim government. The FPCCI chief said he would soon declare his future line of action after taking his executive committee and chamber members in confidence. Malik urged the FBR to convene a round-table meeting with business leaders under FPCCI to discuss all major issues pertaining to the federal budget 2013-14. “Misconcep- tions are cropping up before the announcement of budget,” he said. A strong reaction also came from the SITE Association of Industry which in an urgent meeting vowed to resent any budget unveiled by anyone other than the newly-elected govern- ment. “The industry which already suf- fered due to strikes and riots is now going to be hit with a drone attack in the form of a mini budget,” said SITE Association of Industry Chairman Dr Arshad A. Vohra. The association’s executive com- mittee agreed that the move, full of heavy taxes before the end of fiscal year 2013, was aimed at sabotaging the country’s already crippled economy as well as the worst-affected business community. “The SITE Association of Industry appeals to the president of Pakistan to not sign any mini budget through pres- idential orders and let the new govern- ment decide the matter on its own,” the chairman said. The budget in question envisages an increase in sales tax from 16 to 17 percent; further tax of 2 percent on unregistered sales; turnover tax to be increased from 0.5 percent to 1 per- cent; 0.2 percent withholding tax on cash withdrawals from banks to be in- creased to 0.3 percent; income tax on exports proceeds to be increased from 1 percent to 1.5 percent; withdrawal of zero-rated tax on domestic sales of five sectors that include textiles, leather, carpet, sports and surgical. The GST on sugar is also to be in- creased from 8 percent to 17percent; a 5 percent tax on the value of new cars to be purchased and 10 percent withholding tax on all domestic elec- tric bills with consumption of more than 1,000 units. INTRODUCTION OF RS 152B MINI BUDGET ( ( Caretaker govt has no mandate to tax, make budget, say businessmen Profit-taking bucks 3-day bullish run at Karachi bourse KARACHI NNI Equities at Karachi Stock Exchange (KSE) followed international bearish trends in a volatile trading session on Thursday as it snapped a three-day bullish streak with major chunk of profit-taking was wit- nessed in the big players. The benchmark KSE 100-Index fell by 0.54 percent or 116.25 points to close at 21,342.65 levels on Thursday as against 21,458. 90 levels recorded on Wednesday as top scrips like Oil and Gas Development Company Lim- ited remained on the selling counters after recent consistent bullish charge. The KSE All Share Index declined by 0.96 percent or 144.92 points to end at 14,969.68 levels on Thursday as against 15,114.60 levels reported on Wednesday, the KSE 30-Index dropped 0.59 percent or 98.36 points to conclude at 16,588.64 levels on Thursday as against 16,687 levels posted in the pre- vious trading session, whereas the KMI 30-Index skidded by 0.55 percent or 203. 22 points to finish trading activities at 36,754.12 levels on Thursday when com- pared with 36,957.34 levels witnessed the other day. The Karachi Stock Exchange began trading activities on a bullish note on Thursday morning which propelled the main index above 21,600 levels and soon the main index hit the intraday highest level of 21,621.85. However, the global selloff put Pakistani stock market under pressure as well and the main index nose- dived into the lowest level of the day of 21,300.88 from the intraday top in no time before another bullish rally took it back close to the intraday highs. The main index again came across profit-taking above the 21,600 levels and it gradually dropped value during the rest of the ses- sion and finished the day quite close to its intraday lowest level. The market volumes shrank by 99.447 million shares to 472.973 million shares on Thursday as against trading of 572.420 million shares recorded on Wednesday as local investors acted in a cautious manner following bear- ish trends in the global equity markets. SC orders JJV to submit 75% LPG sale to State ISLAMABAD: The Supreme Court (SC) or- dered the management of Jamshoro Joint Venture to deposit 75 percent of LPG sales revenue in the national exchequer. The three- member bench of SC recommenced the hear- ing of the LPG case on Thursday under Chief Justice (CJ) Iftikhar Chaudhary. During pro- ceedings, the CJ said national wealth was going to waste and no one will be allowed to plunder it. From now, rule of law will prevail in the country, he added. He said the govern- ment did not submit any reply in the court re- garding the case for the last three years but the court knows well how to use its authority. The applicant, Pakistan Muslim League- Nawaz’s (PML-N) leader Khawaja Asif said in his arguments that a political party was given hefty funds of Rs 500 million, but fol- lowing an audit, no irregularity was found. The court ordered that the company use ex- perts to get its sales record audited. ONLINE China assumes charge of Gwadar Port ISLAMABAD: China has formally assumed charge of Pakistan’s deep-water Gwadar Port following an agreement signed between the two countries in February this year. Three com- panies including China Port Holding, China Merchant and Cosco Shipping would be re- sponsible for the handling of the port. Beijing would help Islamabad construct a road, which would link the port with the Coastal Highway. Besides this, China would also provide finan- cial aid to complete the project. ONLINE Food exports up 12.27% to Rs 3.953b in 10 months ISLAMABAD: Food exports from the coun- try increased by 12.27 percent to $3.953 bil- lion during the first ten months of the current fiscal year as against the same period last year. In April 2013, food exports increased by 20.33 percent on a year-on-year (YoY) basis and by 0.96 percent on a month-on-month (MoM) basis, according to the latest data from Pakistan Bureau of Statistics (PBS). The overall food exports during July-April (2012- 13) were recorded at $3.953365 billion the exports of $3.521243 billion during July- April (2011-12). The food products that con- tributed in positive growth included fish and fish preparations, exports of which increased 4.46 percent from $258.766 million last year to $270.301 million this year. Exports of fruits and vegetables also increased by 5.88 percent, and 57.38 percent, respectively, dur- ing the period under review. 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