Top dog arrives to end catfight

Securities and Exchange Commission of Pakistan chairman heads to Karachi as KSE board meets.

KARACHI: Chairman Securities and Exchange Commission of Pakistan (SECP) Salman Sheikh will arrive in Karachi on Friday in a bid to resolve differences between members of the Karachi Stock Exchange’s (KSE’s) board of directors. The board of the local bourse is also scheduled to meet on Friday.

On Thursday, an extraordinary general meeting (EOGM) called for members of the exchange was postponed till November 22, after members had convened. The meeting had been called to devise a strategy to replace the current chairman of the board (a non-member director), according to market sources.

However, following strong-worded letters sent to the exchange on Wednesday evening by the SECP, members agreed to adjourn the meeting until after Eid holidays.

The three letters

KSE received three separate letters from the regulator on Wednesday evening. The first letter sent by the regulator had instructed members to defer the EOGM, as it was called in the absence of non-member or nominee-directors.

The second letter from the regulator termed the appointment of Haroon Askari as acting managing director of the KSE “against regulations and not valid” since it was made without the approval of the SECP. It also instructed Askari to refrain from exercising the powers of MD.

The third letter, according to some observers the harshest one, reprimanded some member-directors for “unruly and hostile” behaviour towards non-member directors. The dispatch also called on member-directors to submit written apologies to their non-member counterparts over the exchange of harsh words during a meeting of the board held last week.

Official sources said that members have until the end of Friday to respond to the letters sent by the regulator – the same day the board is scheduled to meet.

“The SECP letters and responses to them will also be on the agenda of the meeting,” confirmed an official source.

Meanwhile, although it has been confirmed that Salman Sheikh will be in Karachi on Friday, KSE officials said that no official meeting between the chairman and exchange members has been scheduled.

However, analysts expect an informal dialogue between the top regulator and stakeholders – which may bring an end to the long-drawn-out tussle between directors of the country’s largest stock exchange.

Published in The Express Tribune, November 5^th, 2010.