SC invalidates Ghulam’s appointment as SECP Chairman

ISLAMABAD:

The apex court nullified the appointment of Muhammad Ali Ghulam as commissioner and chairman of the Securities and Exchange Commission of Pakistan on Friday, saying that it was against rules and regulations.

A two-member bench led by Justice Jawwad S Khawaja ruled that the appointment was not in accordance with the rules of the SECP Act of 1997 and therefore Ghulam could not continue as head of the commission.

The federal government was directed to make a new appointment without delay, and was told that it must be done in accordance with the SECP Act and should be conducted in a credible, rigorous and transparent manner, through a selection process that ensures that appointees meet all requirements.

Justice Khilji Arif Hussain also declared the decision of amending the SECP Act through the Finance Bill 2003 as illegal. Under section 5 of the SECP Act, added in 2003, it says that decisions of the commission would only be invalid if the constitution of the commission was defective.

The move is likely to expose all decisions taken by Muhammad Ali and his predecessors to the scrutiny of the court, given reports that Ali took many decisions simply in order to benefit vested interests and groups.

The court ruled that this clause must be replaced by provisions ensuring due process.

Petitioner Muhammad Ashraf Tiwana had challenged Ali’s appointment on the grounds that rules were not followed.

The petitioner held that the appointment of individuals to the post of Commissioner or SECP Chairman who were, or have been, members of the stock and commodity exchanges, brokers, directors or shareholders of brokerage companies was against the law.

Tiwana contended that the federal government should be directed to introduce amendments in the existing SECP Act as well as the new SECP Bill, which is pending in the Parliament, in order to prohibit the appointment of such individuals.

Published in The Express Tribune, April 13^th, 2013.