ACE Securities to finally clear investors’ money

Its chairman has agreed to plea bargain, submitted application with NAB

Kazim Alam June 02, 2016
Its chairman has agreed to plea bargain, submitted application with NAB. PHOTO: REUTERS

KARACHI: Victims of the wilful default by ACE Securities, a Karachi-based brokerage house, may get some relief after more than a year: its sponsors who had fled the country in April 2015 have finally agreed to pay back investors’ money.

Sources told The Express Tribune on Thursday that ACE Securities Chairman Iqbal Ismail has agreed to a plea bargain and submitted an application to that effect with the National Accountability Bureau (NAB).

His brokerage house owed approximately Rs533 million to 432 investors at the time of his disappearance.

ACE Securities stopped honouring its investors’ requests for cash withdrawals and share transfers following the sudden escape of its owners from Pakistan last year. It led the Pakistan Stock Exchange (PSX) to suspend its operations on April 27.

Subsequently, ACE Securities Chairman Iqbal Ismail and CEO Haroon Iqbal failed to show up at two consecutive hearing opportunities on May 6 and May 12, which were meant to look into the “non-resolution of a large number of investors’ complaints involving substantial amounts”.

The PSX then cancelled the trading right entitlement (TRE) certificate of ACE Securities on May 15.

The Securities and Exchange Commission of Pakistan (SECP) submitted its final inquiry report to NAB last September for further action. According to the sources, one of the accused, Iqbal Ismail, appeared before a Karachi accountability court on May 20 and submitted an application for plea bargain.

“The review of back-office record and its comparison with the National Clearing Company of Pakistan (NCCPL) data and Central Depository Company (CDC) record revealed unauthorised trading activity and unauthorised movement of clients’ shares from its CDC sub-accounts,” said one source while requesting anonymity.

No one was available for comment at the SECP on Thursday evening.

In a separate development, the SECP has filed a formal reference with NAB in the cases of Stock Street Limited and Capital Vision Securities, brokerage houses registered with erstwhile Lahore and Karachi stock exchanges, respectively.

The apex regulator of the share market has completed its investigation into the affairs of Capital Vision while its probe into the affairs of Stock Street is still ongoing, sources said.

Capital Vision Securities is accused of shifting sensitive information, such as account opening forms and back-office data along with computer hard drives, from its office to an undisclosed location. There are 285 claims valuing Rs213.2 million against the brokerage house.

The SECP acted against Stock Street after receiving investors’ complaints regarding non-transfer of shares and non-payments of dues. A director of Stock Street filed a formal complaint recently stating that the CEO of the brokerage had absconded to the United States. As a result, the PSX suspended all trading terminal of the broker last month.

Published in The Express Tribune, June 3rd, 2016.

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