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November 17, 2019

PIA chief’s profitability statement termed ‘market manipulation’

Business

November 17, 2019

ISLAMABAD: The Securities and Exchange Commission of Pakistan Policy Board termed a statement of PIA chief executive officer regarding the airline’s profitability as tantamount to ‘market manipulation’, seeking enforcement against this.

"The SECP board took serious note of the statement of the CEO of Pakistan International Airlines Corporation regarding profitability of PIA, which prima facie can be taken as manipulating the market," an official statement said on Saturday, referring to the board’s meeting presided over by Khalid Mirza.

“The commission has been directed to look into and take appropriate enforcement action.”

PIA CEO Air Marshal Arshad Malik said PIA’s revenue has increased by more than 40 percent during the past six months.

“PIA has achieved unprecedented numbers of performance and all set to take more aggressive course,” Malik said in a statement last week.

The policy board directed the SECP to develop a system by which public sector organisations are duly monitored for any possible violations of the laws administered by the SECP.

The board called for measures to ensure that service orientation is inculcated in the staff rather than the current obstructive and ‘ruler-like’ mindset.

The board expressed concern over non-appointment of CEO of Pakistan Stock Exchange (PSX) for several months.

The board directed the commission to revisit the proposed growth enterprise market listing regulations of PSX to ease the entire market and make provision for a premium board for a premium tier in the stock exchange for the growth of the capital market and encouraging initial public offerings in the primary market.

The policy board comprises ex-officio members of the ministries of finance, commerce, and law, State Bank of Pakistan, SECP and representatives of private sector. It was noted that ex-officio secretaries who are members of the board do not attend meetings and invariably sent nominees to the meetings.

On SECP annual report 2019, the board asked the commission to go back to the ‘drawing board’ and ensure, “it is professional, it portrays facts that are both positive and negative, states clearly the problems faced by the commission during the past year particularly in reference to unwarranted intrusion by LEAs (law enforcement agencies) and also states realistically future goals and strategic plans of the commission”.

The policy board said the draft of Insurance Bill 2019 should be reviewed to remove harsh regulatory impediments that hamper the overall growth of insurance sector with the aim to facilitate the ease of doing business in the country. Further, the draft of law amendments should be simplified and be based on principles.

The policy board further took up the matter to initiate review process of the Securities Act 2015 to “remove harsh regulatory impediments that hamper the overall growth of securities market with the aim to facilitate the ease of doing business in the country”.

The board also took the decision to review and rationalise the Futures Act 2016 and the Limited Liability Partnership Act 2017, which are onerous and cumbersome, “so as to constitute a facilitating regulatory environment”.

The board also advised the commission to revisit the Regulatory Sandbox Guidelines 2019 (Insurance) and called for appropriate amendments into the companies (further issue of capital) regulations 2018 to facilitate and promote the mobilisation of capital.

The board approved the General Takaful Accounting Regulations 2019, the Provisional Manager and Official Liquidator Regulations 2019, Corporate Rehabilitation Regulations 2019, directive on adoption of IFRS-14 Regulatory Deferral Accounts under section 225 of Companies Act 17, the directive on financial reporting of family window takaful operations by life insurers, and compliance of compulsory group insurance under the Industrial and Commercial Employment (Standing Order) Ordinance 1968.

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