Clash of titans: New twist in war between Ghani Osman, JS & Co

Ghani Osman suspicious that suspension of its licence and FIR against it are correlated, JSCL denies.

KARACHI:

Two separate events shook Haji Abdul Ghani on October 25. It was Friday and after close of trading, the Securities and Exchange Commission of Pakistan (SECP) suspended registration of his brokerage firm.

As company officials frantically tried to avoid potential disaster, an FIR was lodged against him in Karachi – part of what is turning out to be a dirty war between Pakistan’s rich and mighty.

Ghani Osman Securities’ lawyers worked late into Saturday morning to prepare court documents to fight for pre-arrest bail and getting the SECP order suspended.



Lawyers involved in the case say the fact that the SECP directive and the FIR, which was registered by Jahangir Siddiqui and Company Limited (JSCL), came at the same time raises a lot of questions.

“The SECP order arrived in the evening and the FIR was registered about the same time at around 6:00pm. This was deliberately done to overwhelm our client,” said Murtaza Wahab, lawyer for Ghani Osman Securities.

“Small investors have put around Rs3 billion with Ghani Osman Securities. Imagine what would have happened if the stock market had opened on Monday and they weren’t able to trade,” he said.

The SECP action followed complaints that Ghani Osman Securities had stakes in another brokerage firm, which shut operations without settling dues of some clients.

Hum Securities, in which Ghani Osman Securities had 10.08% shares, was asked by the regulator to clear the dues of its investors, according to case documents available with The Express Tribune.

“There was no basis for suspension of the brokerage licence of Ghani Osman. My client’s firm is a completely separate entity,” said Wahab.

“The Karachi Stock Exchange communicated that there were 62 claims, which were all settled by Hum Securities within the given timeframe of 90 days,” he said.



The FIR lodged late last month relates to a brawl that took place during the meeting of JSCL shareholders on April 5, 2013.

JSCL CFO Hassan Hussain approached the Saddar Police with a complaint that Haji Ghani Usman, his son Asim Ghani and Shunaid Qureshi had forcefully made their way into the meeting room along with 50 hooligans.

However, the Sindh High Court (SHC) allowed protective bail to Haji Ghani Usman and Asim on pleas that the parties were already contesting cases against each other and it could not be ruled out that the recent FIR was an attempt to pressurise Ghani Osman Securities.

“What could be more mala fide than the time gap between the incident and the lodging of the FIR,” said the lawyer.

Around 20 lawsuits have been filed in courts, which involve brokers Jahangir Siddiqui, Aqeel Karim Dhedhi, Haji Abdul Ghani, Jahangir’s nephew Shunaid Qureshi and the Jang Group.

JSCL and Shunaid Qureshi had already come into public, accusing each other of siphoning off money from listed companies.

Earlier this year, JSCL filed a lawsuit alleging that Rs220 million was taken out of Al-Abbas Sugar Mills, which is headed by Shunaid Qureshi as CEO. Ghani’s family has majority shareholding in the mill while Jahangir Siddiqui has a smaller stake.

A few days later, the controversy related to payment of Rs431 million to Ali Jahangir as consultancy fee surfaced. That was the time when the brawl took place at the shareholders’ meeting of JSCL. Some television channels showed footage of Shunaid Qureshi and Ghani Usman during the melee.

JSCL CFO in the latest FIR said that Qureshi being not a shareholder wasn’t allowed to attend the meeting. Haji Ghani had a few shares but no substantial stake in JSCL.

A JS Group spokesman said it was preposterous to correlate registration of the FIR with any other event.

“We were pursuing the case from day one when the incident at the AGM took place, regularly checking with police when they would lodge an FIR against Shunaid Qureshi and Haji Ghani.”

He said even court was approached in this regard months before October. “It was only after a contempt notice was issued that the respective police station heard our complaint. The notices and everything else is public information. To say it happened all of a sudden is wrong.”

SECP spokesman was not immediately available for comments.

Published in The Express Tribune, November 5^th, 2013.

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