LCCI fears ‘whistle-blower’ rules will spoil business climate

Asks govt to hold consultation before implementing the regulations

LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has expressed concern over the whistle-blower regulations of the Securities and Exchange Commission of Pakistan (SECP) and called for consultation with the stakeholders before their implementation.

At a consultative meeting, presided over by LCCI President Abdul Basit, participants cautioned that forceful implementation of the 2017 regulations would only deteriorate business atmosphere in the country.

The business community has reservations about SRO 349(I)/2017 issued on May 15 that will be applied to public limited companies.

A clause in the SRO says an employee of a company can play the role of an informer for the SECP, which the businessmen call sheer injustice.

“Such clauses will provide employees an opportunity to blackmail the corporate sector for vested interests. It will also give another sword to the SECP officials to interrogate and harass the corporate sector,” Basit commented.

He warned that the SRO would have a harsh impact on the corporate sector as its scope would be expanded to the accounts and financial affairs of companies.

“Such acts will cause trust deficit between the private sector and the government and will also undermine productive activities,” he said.

The LCCI president was of the view that implementation of the SRO was very sudden and it needed to be applied in different phases. Initially, the regulations should be implemented in state-owned public companies only.

Gradually, after five years, the regulations should be applied to other listed companies on a voluntary basis after providing them requisite support, proper training and technical assistance.

“Frivolous complaints should be subject to penal action,” Basit suggested. “There should be no option for anonymous complaints.”

He asked the government to withhold implementation of the SRO until a thorough and meaningful consultation was done with business chambers, associations and other stakeholders.

“All measures should be taken to ensure that corporate sector businesses are not blackmailed/ harassed by the employees,” he said.

The meeting participants expressed fear that the SRO would open new ways of blackmailing and give new powers to the officials to disturb the business community. They stressed that no step should be taken without taking the stakeholders on board.

Published in The Express Tribune, June 16^th, 2017.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.