Zafar Abdullah. PHOTO: File
The Ministry of Finance has issued the notification to suspend Hijazi and appointed Zafar Abdullah as acting Chairman of the SECP. However, Abdullah’s appointment was in violation of the law, as he is not the senior most commissioner, as claimed by the Finance Ministry.
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“In exercise of the powers conferred by Section 6 of the Securities and Exchange Commission of Pakistan Act, 1997, read with Section 16 of the General Clauses Act 1897, the federal government is pleased to place Zafarul Haq Hijazi, Chairman SECP under suspension with immediate effect and until further orders”, reads the official notification.
The Joint Investigation Team (JIT) – which probed the Sharif family’s offshore assets in line with the apex court’s April 20 verdict in the Panamagate case— had alleged that the SECP chairman tampered with official records of Sharif’s sugar mills.
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On directions of the apex court, the FIA registered an FIR against Hijazi and obtained his physical remand from the District Court. As many as four officers of the SECP including senior most Commissioner Tahir Mahmood have recorded statements against Hijazi for influencing them to tamper the records.
Because of the same reason, Finance Minister Ishaq Dar did not appoint Tahir Mahmood as acting chairman despite his seniority.
The SECP regulates the country’s corporate sector except banks and is also the custodian of record of the companies.
“In exercises of the powers conferred by Section 6A of the SECP Act 1997, the federal government is pleased to appoint Zafar Abdullah, senior most Commissioner of the SECP, as acting chairman, SECP with immediate effect and until further orders”, reads the finance ministry’s second notification.
The Section 6A of the SECP Act of 1997 states that “At any time when position of the chairman is vacant or the chairman is unable to perform his functions due to any cause, the federal government shall appoint senior most commissioner of the commission to be the acting chairman of the commission until appointment of the chairman on a regular basis.
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Tahir Mahmood became the Commissioner SECP in September 2010. He is the senior most commissioner, serving a third term as commissioner, shows the SECP record.
Zafar Abdullah was appointed commissioner in August 2012 and won a second term in 2015. Other senior officers, Akif Saeed and Fida Hussain, were appointed commissioners in December 2014.
However, in order to ignore Tahir Mahmood, the finance ministry came up with a novel justification that the seniority would be determined from the date of new term as commissioner instead of the length of the service.
An official of the finance ministry argued that Tahir Mahmood was recently given a third term and cannot be considered as senior most commissioner.
However, going by this criterion, Akif Saeed comes up as the senior most commissioner as Zafar Abduallh won a second term in August 2015 while Saeed became commissioner in December 2014.
The suspended SECP Chairman, Zafar Hijazi, had himself recently informed the Supreme Court that Tahir Mahmood was the senior most commissioner.
“The issue pertaining to Chaudhry Sugar Mills Pvt Limited has been dealt with by the enforcement department of the Company Law Division of the Commission which at the relevant time was being supervised by the senior most Commissioner, Tahir Mahmood”, according to the Hijazi’s reply to the apex court.
The SECP had submitted this reply in the apex court through the Additional Attorney General of Pakistan after the JIT had alleged that the SECP was not cooperating.
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