SHC dismisses AKD directors’ bail plea in EOBI scam

KARACHI: The Sindh High Court on Friday dismissed the bail application of AKD Securities’ directors in the EOBI shares scam.

The FIA had registered a case against former chairman and officials of the Employees Old-Age Benefit Institution, AKD Securities and private textile company directors for causing Rs290 million losses to the national exchequer and the state-run pension fund through shares manipulation.

The FIA had said that chief executives of the AKD Securities Mohammad Fareed Alam and other directors, including Tariq Adam Ghumar, Mohammad Iqbal and Hina Junaid Balmgumwala, were found involved in violation of third schedule of brokers and agents registration rules 2001. According to the FIA, the chief executive officer of M/s Amtex Khurrum Iftikhar, directors Shahzad Iftikhar, Nadeem Iftikhar, Zafar Saleem, Faiza Khurrum, Sajida Khurrum and Nusrat Parveen were found involved in violation of Section 187(j) of the Companies Ordinance 1984.

Three AKD Securities directors Mohammad Fareed Alam, Tariq Adam and Mohammad Iqbal have filed their bail applications in the SHC against dismissal from the trial court.

The SHC’s single bench, headed by Justice Abdul Rasool Memon, which reserved the judgment on a bail application, observed that there was no denial to the transaction of purchase of M/s Amtex share by the EOBI and colossal loss of Rs290 million to EOBI on account of decrease in value of share from Rs19.50 to Rs2.73 per share involved in purchase.

The court observed that there was also no denial to status of applicant being directors of AKD Security, the preparation of research report and issuance of prospectus by AKD Limited. The court observed that the record placed before the court also does not negate the views of additional attorney general who submitted that criminal involvement of applicants came on the surface during course of investigation proceedings therefore question raised regarding delay with FIR is to be seen at trial proceedings. The court observed that admittedly the investigation was still in progress and offence fall under Section 409 of PPC against applicant and punishable for life imprisonment.

The court observed that bail application of AKD directors could not be accepted and dismissed the same. It is pertinent to mention that Additional Attorney General Salman Talibuddin opposed the bail application submitting that applicants have violated the Section 3(f) of EOBI Rules 1979 as M/s Amtex was not competent company for purchasing of shares by the EOBI in light of EOBI rules and role of applicant could not be excluded from the offence.

Applicant counsel Shahab Sarki submitted that applicants and other directors of the company were implicated in the case on basis of research report which has nothing to do with any share price manipulation of private company. He submitted that research report with regard to shares of private textile company was not based on malafide as initially the share prices increased and shareholders got profit from it after selling and purchasing their shares. He submitted that charges against the applicants are baseless and requested the court that applicants may be granted bail.

EOBI in August 2010 bought 17,350,000 shares of M/s Amtex Limited in two phases on August 16, 2010 and August 27, 2010 for Rs337659914, with the approval of a two-member committee comprising the then EOBI chairman Zafar Abbas Gondal and DG (Investment) Kanwar Khursheed Wahid. The case was pending at the trial court.