Where dysfunction rules

Nearly four months after the federal government suspended Zafar Hijazi as the head of the Securities and Exchange Commission of Pakistan (SECP), the latter continues to be the chairman of the financial regulatory agency strictly on technical grounds. Since the indictment of Hijazi in an official record tampering case, the job ought to have gone to Zafar Abdullah, who was earlier named as acting chairman of the agency. A clause within the SECP Act of 1997 empowers the government to appoint a new chairman within 120 days of the post falling vacant. Since there is no mention of incapacitation or removal of the incumbent post holder in the clause it would seem, as pointed out by the law ministry, that notwithstanding Hijazi’s suspension the post of SECP chief is clearly not vacant. So there is also no question of the 120-day limit elapsing right away.

Should we regard the law ministry’s interpretation as correct, the authorities may have to push back the appointment of a permanent head of the corporate regulatory body by another five months. Hijazi will thus hold onto the post till Dec 16, 2017 when his term finally comes to an end. This means that the federal government will have to handle the SECP’s affairs on an adhoc basis until April 2018.

There are wheels within wheels though. By that time, however, three SECP commissioners, including Hijazi, will already have stepped down, creating quite a headache for the government. Under the rules, the SECP cannot function with just two commissioners of the five designated ones. The finance ministry will be hard pressed for a solution. One such option would be to retain at least one retiring commissioner. Another option is to expand the list of commissioners — a move that seems to have the blessings of the government but requires Ishaq Dar’s approval. A fat chance either way.

Published in The Express Tribune, November 22^nd, 2017.

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