ISLAMABAD: Pakistan Tehreek-e-Insaf (PTI) senior leader Jahangir Tareen was found guilty of insider trading eight years ago; however, he returned Rs70 million that he made through illegal means, the corporate sector regulator informed the apex court on Tuesday.
As the three-judge bench of the apex court, headed by Justice Mian Saqib Nisar is set to resume hearing in the case filed by PML-N’s leader Hanif Abbasi, seeking disqualification of the PTI general-secretary on Wednesday (today), the Securities and Exchange Commission of Pakistan (SECP) has submitted a concise statement, which may give an interesting twist to the case.
The reply stated that Tareen violated the Insider Trading Ordinance-1969 and the Companies Ordinance-1984 in the United Sugar Mills (USML) acquisition, according to the SECP’s response.
“He also made roughly Rs71 million gains but returned Rs73.1 million to the SECP — including fines and legal cost that the regulator incurred on investigating the case.”
On the other hand, Tareen in his concise statement rejected the petitioner’s claim that no “admission” or “confession” (express or implied) was ever made by him in relation to the subject.
The SECP in its reply says that Jahangir Tareen Khan being director of the JDW was authorised by its board of directors to negotiate the acquisition of the USML. Hence, he was privy to all inside material/information during the acquisition of the USML, and consequently made a hefty gain of Rs70.811 million in violation of Section 15A of the Securities and Exchange Ordinance-1969.
“The unusual trading pattern and price movement in the shares of the USML from November 2004 to November 2005 was observed by Jahangir Tareen Khan and investigation under Section 29 of the SECP Act 1997 was ordered on December 12, 2006.”
“The investigation report revealed contravention of Section 15A of the Ordinance of-1969, sections 214, 216, 217 and 222 of the Companies Ordinance-1984 and Section 4 of the takeover Ordinance.”
It was further revealed that Tareen acquired 341,780 shares through M/s Haji Khan and Allah Yar and made a gain of Rs70.811 million through the sale of his shareholding in the USML, in the stock market and under the public offer made by the JDW in October 2005.
Later, the SECP through a letter dated December 3, 2007 required Tareen to explain his position regarding allegations surfaced in respect of un-lawful gain.
In response of the letter, Tareen submitted a reply on December 8, 2007, wherein it is stated that, “in view of the alleged violations pointed out by the SECP, I admit it does seem possible that some provisions of law may have unwittingly been contravened.”
Tareen in his reply offered voluntarily return of illegal gain of Rs70.811 million, recoverable under Section 15-B (3) of the Ordinance of 1969 along with maximum fine of Rs1.258 million under sections 214, 216, 217 and 222 of the Companies Ordinance 1984 and Section 4 of the takeover ordinance.
The SECP in its letter dated January 11, 2008 directed Tareen to deposit the illegal capital gain made out of insider trading along with all fines applicable for contravention of the relevant provisions of laws.
The SECP has prayed the apex court that it has discharged its regulatory role vigilantly and diligently as it probed the entire matter which culminated into return of entire illegal gain and recovery of penalties for contravention of relevant provision of laws.
“It is respectfully prayed that this honourable court may decide the case as deemed appropriate.”
Published in The Express Tribune, November 23rd, 2016.