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July 11, 2018

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SECP orders PSX to remove Lawai from chairmanship

KARACHI: Capital markets regulator Securities and Exchange Commission of Pakistan (SECP) on Tuesday ordered the Pakistan Stock Exchange (PSX) to remove its chairman Hussain Lawai following his arrest on charges of money laundering.

The SECP said in a statement that it was ordering immediate removal of Lawai as PSX chairman “in the interest of the public and the capital markets”.

Lawai was elected as chairman of the board of directors of PSX in last May.

“The commission after considering the circumstances … with respect to Lawai, in the interest of general public and the capital markets, in exercise of its power conferred under

Section 12 read with Section 170 of the Securities Act, 2015, hereby directs PSX, through its chief executive officer, to immediately remove Lawai as chairman of the board of directors of

PSX under intimation to the commission and appoint a new chairman of the board, while ensuring compliance with the regulatory requirements,” the SECP directed to the PSX.

Lawai, a banker and former head of Summit Bank was arrested by the Federal Investigation Agency (FIA) last week in connection with alleged bank transaction worth billions of rupees.

The FIA accused Lawai for facilitating the opening of 29 fake accounts in the Summit Bank, Sindh Bank, and United Bank Limited.

FIA officials said at least 32 people are being investigated for laundering billions of rupees through 'benami' or fictitious bank accounts. The scandal also includes former president Asif Ali Zardari and several of his close associates, including sister Faryal Talpur.

Lawai served as the president and CEO of Summit Bank Limited from 2008 till his retirement in 2016.

He presently holds position on the boards of Pakistan Institute of Corporate Governance, GlaxoSmithkline Pakistan Limited, Wyeth Pakistan Limited, and Searle Company Limited.

The SECP statement said a first information report, dated July 6, 2018 has been registered by the Federal Investigation Agency against Lawai and other co accused, under the Pakistan Penal Code read with Prevention of Corruption Act, 1947 and the Anti-Money Laundering Act 2010.

The FIR, among other individuals, also nominates Lawai as one of the accused, and he has been arrested by the FIA for further investigation. A judicial magistrate in Karachi on last Saturday remanded Lawai and co-accused Taha Raza in the custody of the FIA until July 11 in a money laundering case.

The SECP instruction followed a PSX board meeting held on Monday to discuss Lawai’s issue after the FIA’s action over the weekend. PSX at the meeting decided to retain Lawai as chairman till any instruction from the SECP.

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