SHC dismisses NAB appeal in securities embezzlement case

The Sindh High Court (SHC) has recently dismissed the National Accountability Bureau’s (NAB) appeal against the acquittal of a securities company’s former director in a fraud and embezzlement case.

NAB had filed the appeal against the acquittal of Arif Raza Kazmi in a corruption reference pertaining to the offence of ‘cheating public at large' and 'criminal breach of trust' to the tune of Rs124.45 million.

A division bench of the high court headed by Justice Mohammad Junaid Ghaffar inquired a NAB special prosecutor as to how the acquittal appeal had been filed as the acquittal order of the respondent was based on an order passed by the high court in an identical matter, in which the court had quashed the criminal proceedings in the case.

According to NAB, the Securities and Exchange Commission of Pakistan (SECP) and Karachi Stock Exchange (KSE) had received complaints of investors regarding non-payment of their outstanding dues and alleged unauthorised transfer of shares by a securities company.

The NAB reference had alleged that the chairman, directors and sponsors of the company were authorised to operate bank accounts and empowered to operate the company's participant account maintained with the Central Depository Company.

The KSE got the claims verified through reputed chartered accountant firms and a total of 402 claims with a value of Rs124.45 million were approved of which the amount of Rs49.45 million of the claimants was still outstanding against the company.

NAB filed a supplementary reference against the applicant and other accused for allegedly committing offence of ‘cheating public at large' and 'criminal breach of trust' to the tune of Rs.124.45 million.

The SHC observed that the co-accused in the case had filed a petition with the court to quash criminal proceedings. The high court observed that the prosecution had failed to collect any iota of evidence to justify the indictment of the petitioner.

The bench observed that in the present case, the respondent’s case appeared on the same footing as apparently, the period during which an enquiry was conducted was from July 1, 2008 to June 30, 2009 whereas, the respondent was appointed as a nominee director in the company in question in September, 2008 after about first three months of the said period and he resigned in March 2009.

The high court observed that the respondent never attended even a single meeting of the board since being nominated as a director.

The bench observed that it had further come on record that no documents of any sort were produced, shown or even alleged by the prosecution to have been signed by the respondent in respect of the transfer of shares nor he authorised any other person for such purposes.

The high court observed that it was a matter of record that the respondent, being an employee of a Modaraba company having 18.45 per cent shares in the securities company was nominated by the said Modaraba company as a nominee director.

The court observed that NAB had failed to make out a case against the present respondent and there was no material on record that could have ultimately resulted in the conviction of the respondent. The court dismissed the appeal of NAB.