Cabinet to appoint SECP chair in next meeting

ISLAMABAD: The federal cabinet is likely to appoint a new permanent chairman of the Securities and Exchange Commission of Pakistan (SECP) in its upcoming meeting for which the finance ministry would move a summary to the former, an official said on Monday.

“On Wednesday, the finance minister would suggest three names, which are to be included in the summary after meeting with the stakeholders,” an official source, who is privy to the matter of this appointment, told The News.

The official said one of the five commissioners, whose names were under consideration, would be appointed as the chairman of the SECP. These commissioners include Tahir Mehmood, Shaukat Hussain, Shauzab Ali, Aamir Ali Khan and Farrukh Sabazwari. The last two were appointed by the incumbent government on November 15, 2018, the official added.

It is worth mentioning that this post is lying vacant since October this year when Shaukat Hussain quit as acting chairman, citing personal reasons. Hussain was appointed as head of the SECP by former Prime Minister Shahid Khaqan Abbasi.

Thereafter, there were four commissioners running for the slot, out of which the ministry would include the names of three in its summary, while recommending one of them to be appointed as Chairman SECP.

Among them, the most senior commissioner is Tahir Mehmood, associated with the SECP/ the erstwhile Corporate Law Authority since 1989. He is a fellow member of the Institute of Cost and Management Accountants Pakistan (ICMAP) and the Institute of Corporate Secretaries of Pakistan (ICSP). He also has a degree in law. Tahir has experience in company law administration, takeover laws, corporate restructuring, mergers, takeovers, corporate finance, judicial order, writing, etc.

Shauzab Ali is a chartered accountant, who before his appointment in the SECP as Commissioner in March 2018, was working with the Asian Development Bank (ADB). He has also worked with the Standard Chartered and Allied Bank.

Aamir Ali Khan, currently working an as SECP commissioner, has served as an Executive Director at the commission. Khan has had a career in banking sector. He has served in senior positions at Standard Chartered Bank, Royal Bank of Canada, and American Express Bank Ltd etc.

Farrukh H. Sabzwari is an MBA in finance and has built his career in the securities markets. He has served in BMA Capital Management, Credit Suisse Securities (Singapore), KASB Securities, and AKD Securities.

Currently two SECP Commissioner, Shauzab Ali and Farakh Sabzwari are strongly pitching for the slot of chairman. Sabzwari enjoys support from the brokerage industry, while prominent Pakistan Tehreek-e-Insaf (PTI) leaders are lobbying for Ali, the senior official said.

Interestingly however, while making the appointment, the government would have to consider the directions of the Supreme Court of Pakistan in Constitution Petition No 59/2011, Muhammad Ashraf Tiwana versus federation and others, announced on April 12, 2013.

The petitioner had challenged the appointment of Muhammad Ali as Chairman SECP, pleading Ali was not acting as independent regulator as his decisions were biased toward the people/businessmen who supported him to become the chairman.

The court, in para 5 of the judgment, stated that the SECP as such is amongst the most important regulatory authorities directly impacting the economic life of the citizens of Pakistan.

Citing Muhammad Yasin vs. Federation of Pakistan (PLD 2012 SC 132), the court held:”there is an ever-greater nexus between the proper and independent functioning of regulatory bodies and the economic life of the nation and its citizens”.

In para 20 of the judgment, the judges noted that “Section 5(1) of the Act specifies that a Commissioner ”shall be a person who is known for his integrity, expertise, experience and eminence in any relevant field, including the securities market, law, accountancy, economics, finance, insurance and industry”.

“Under the law, the federal government has the authority to appoint the Chairman and Commissioners of the SECP. The Federal Government, however, has no absolute and unbridled powers in this behalf.

It is constrained by the aforesaid requirements of the Act.” “This requirement imposes a duty on the federal government to put in place a process which ensures that the requirements of the law are met,” it added. The court had sacked the SECP Chairman Muhammad Ali in the said judgment.