Removal of chairman SECP: an inside story

Muhammad Ali Ghulam wanted to standardise operations across all SECP divisions, and he wanted me to help him do it.

“There is a natural aristocracy among men. The grounds of this are virtue and talents.”

— Thomas Jefferson, Founding Father and third President of the United States 

When I met Muhammad Ali, the now former chairman of the Securities and Exchange Commission of Pakistan (SECP), almost this time last year, I had no reason to like him. To me, he was the person who had disbanded the SECP Law Department, which I had put together myself more than five years ago during my time there as executive director law. Interestingly, the chairman SECP did not have much reason to like me either: I had been rather critical of his actions and had, in fact, published an article, in these very pages, roundly questioning his judgment.

By the end of my hour-long meeting, however, I realised that my opinion of him, formed as it had been in absentia, was misconceived. Whilst I found him personally gracious despite my article (in fact, we discussed it at length and he gave me his version of events), I was most struck by his determination to rethink and build the institution he had been appointed to lead rather than to use his position merely for self-aggrandisement. His plans were ambitious. He wanted to standardise operations across all SECP divisions, and he wanted me to help him do it.

To say that I was intrigued by his proposal would be an understatement. I had worked closely with two chairmen and was familiar with the kind of pressures they could be up against, both from within and without. I, therefore, had little faith in the possibility of success and also had very little time; I was due shortly to leave for London to commence a PhD in Law. My excuses, however, were no match for the chairman’s powers of persuasion. He was determined to have his standardised procedures and had decided that I was the person who could do it for him.

The next few months were a tour de force. Although I had initially been assigned to draft three manuals (for Litigation Management, Adjudication and Supervision of the SECP’s regulated sectors), we soon realised that we, in fact, needed five: the Supervision Manual was to be subdivided into Off-site Surveillance and Monitoring, Inspection and Enquiry and investigation manuals. Such was the complexity and magnitude of the task that I was ready to give up. The chairman, however, would not have it. He simply upped the support: he formed a senior management committee to review the manuals and remained personally engaged in all stages from brainstorming, to drafting, to finalisation.

On September 26, 2012, the SECP announced the formal launch of the five manuals and hailed it as a milestone in creating greater transparency and increasing market confidence in the working of the regulator. Despite the accolades being lavished on me, I was acutely aware that none of what my team and I had achieved would have been possible without the inspiration, leadership and sheer energy that the chairman had brought to the exercise. For him, the manuals were nothing short of a revolution. He had already set in motion plans to train all SECP officers along the lines prescribed in them. Within a year, he, with the support of his commissioners and senior management, would have overhauled and uplifted an entire institution.

Time, however, was not on his side. On April 12, 2013, his appointment both as chairman and as commissioner was set aside on the ground that it had been made without due process. Even on that dark day, the irony of the order was not entirely lost on me: a man who had so much faith in processes was made the scapegoat for the government’s failure to create such processes. My sense of loss and tragedy, however, is not out of compassion for the chairman, because I believe he has the strength of character and ability to rise again with renewed vigour, keener insight and sharper focus. The loss I feel is for the SECP, which has been left rudderless, midstream. I am not entirely sure if the institution, too, will rise again.

Published in The Express Tribune, May 7^th, 2013.