The National Accountability Bureau (NAB) has begun investigations into allegations of a multi-billion-rupee security fraud against directors of a stock and bond broker, The Express Tribune has learnt.
The probe was initiated against YS Securities and Services following complaints of defaults over payments to 14,000 investors worth about Rs4 billion, sources familiar with the matter revealed.
Company directors Zulsham Khan and his brothers Farooq Khan and Gulfam Khan have gone underground ever since losing Rs4 billion.
Complainants said the directors had registered their company with the Lahore Stock Exchange (LSE) and Karachi Stock Exchange (KSE). They lured investors through exorbitant returns and managed to receive Rs4 billion in investments.
YS Securities and Services had established offices in Lahore, Karachi, Peshawar, Gujranwala, Faisalabad and Multan, sources familiar with the matter further revealed.
An advertisement in newspapers will soon be published calling on victims/investors to record their statements before NAB, sources added. So far, 944 persons have claimed of being deprived of their money worth of Rs244 million.
During the course of inquiry, it was revealed that the company had invested all of the investors’ money with other brokerage houses without the consent of the investors, and sunk the entire amount.
Following this, the company stopped paying the investors. When the investigators tried to contact the company, they found that the offices were locked and the directors were missing.
NAB has sought details of bank accounts and assets of the management of YS Securities from the State Bank of Pakistan (SBP), as well as a record from the Securities and Exchange Commission of Pakistan (SECP).
NAB Punjab Director Atiqur Rehman told The Express Tribune that after receiving a reference from the LSE, examining the record and recording statements of affected investors, a formal inquiry has been authorised.
He said that after recording statements of more investors, a reference would be filed against the accused persons in an accountability court.
He added that the entire liable amount would be returned to the affectees once it is recovered from the accused persons.
Published in The Express Tribune, November 7th, 2012.
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