SHC restrains FIA from taking coercive action against brokerage firm

The Sindh High Court (SHC) has restrained the Federal Investigation Agency (FIA) from taking any coercive action against a brokerage platform and directed the agency to continue with the inquiry with regard to fraudulent activities, in accordance with the law.

The interim order came on a petition of inter-market securities seeking a court injunction against the FIA’s notice to private banks calling upon them to debit block bank accounts of the petitioner’s shareholder and associate IT companies.

A counsel for the petitioner submitted that the petitioner was stated to be a market leader full service brokerage platform offering trade execution, investment banking and advisory as well as equities and economic research and most accredited equity market in the country.

He submitted that the FIA had issued notices to private banks in an inquiry against IT company ABTACH and private persons calling upon them to debit block bank accounts and provide record in respect of ABTACH and others,.

He submitted that the petitioner and others were performing business in IT field and rivaled by Axact company doing business in the same field which had mobilised the FIA.

He said that ABTACH had also filed a petition against harassment by the FIA and obtained a restraining order from the SHC. The counsel submitted that if the impugned notices were acted upon, the entire market will crash leading to a chaos and bankruptcy of thousands of the customers of the petitioner damaging its reputation irreparably and cancelling of its licence with thePakistan Stock Exchange.

He submitted that the Section 31 of the Prevention of Electronic Crime Act binds the investigation officer to immediately bring to the notice of the court the fact of acquisition of data collected in terms of notice but he had not complied with such requirements of the law which smacks of mala fide intent on his part.

A division bench of the SHC headed by Justice Mohammad Iqbal Kalhoro after a preliminary hearing of the petition observed that the contention raised required consideration and issued notices to the federal law officer, FIA and others for February 24.

The high court, in the meantime, directed that the FIA may continue its inquiry strictly in accordance with the law, avoiding any coercive action against the petitioner.

The bench observed that during the inquiry, if the petitioner or its shareholders wished to authorise payment to their customers from the debt block accounts, they may communicate with a given bank to authorise such payments and the given bank shall process the same only on such authorisation.