A board member of a public gas utility, appointed by the government, has bought 200,000 shares of the company in the name of his wife, raising questions of possible insider trading.
Sui Southern Gas Company (SSGC) is a public utility whose major shareholder is the government of Pakistan having 81% shares through the Ministry of Energy and other institutions.
The government appoints eight board members of the company that mostly consist of supporters of the political party in power. These directors charge a hefty fee and also follow the policies of their political parties.
Through a court order, recently, SSGC succeeded in overturning the Oil and Gas Regulatory Authority’s (Ogra) decision and managed to get 18% unaccounted-for-gas (UFG) allowance on imported re-gasified liquefied natural gas (RLNG).
This will likely end the company’s financial woes by turning the negative equity into positive, following a financial turmoil over the past three years.
A report about this possibility was submitted with the Securities and Exchange Commission of Pakistan (SECP) by the company secretary on February 14, 2022 and its copies were provided to the directors for information.
Later, one of the directors, namely Raziuddin Monem, bought 200,000 shares of the company in the name of his wife (Ghazala) at a price of Rs10 per share on February 21, 2022.
Monem is the Chairman of Ethics Committee of the SSGC board.
Immediately after learning about the company’s better financial position, the director invested in shares of the company to make profit on the basis of knowledge he gained while being on the board, according to sources.
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It has raised questions of insider trading, sources said.
In the recent past, the general manager (finance) of SSGC had to resign and leave the country, when the National Accountability Bureau (NAB) accused him of insider trading in a graft case.
SSGC’s version
According to a company spokesperson, the disclosure of material information regarding Islamabad High Court (IHC) decision related to ordering Ogra to issue RLNG prices as per ECC (Economic Coordination Committee) guidelines, was publicly uploaded timely and appropriately on the Pakistan Stock Exchange (PSX) website through PUCAR on February 14, 2022 as per the correspondence manual of PSX.
The disclosure of interest by directors/ share purchased was publicly uploaded timely and appropriately on the PSX website through PUCAR on February 22, 2022 as per the correspondence manual of PSX, the spokesperson said.
“It is important to note that the directors are not involved in day-to-day affairs of the company’s management.
“Secondly, the transaction date is February 21, 2022 which is well after the disclosure of material information by the company.”
Published in The Express Tribune, February 25th, 2022.
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