POT CALLING THE KETTLE BLACK
(ulta chor kotwal ko dantay)
The Pakistani newspapers reported today that, The Public Accounts Committee(PAC) called a meeting of SECP (Security Commission of Pakistan) Chairman, Dr. Tariq Hassan over the downcrush of Karachi Stock Exchange which so far has lost over 3500 points, and comes to 35% of the total KSE investment. The meeting was also attended by the KSE elephant, Thug Moin M. Fudda, M.D (Manipulating Director) of the KSE.
I have the opportunity to reproduce the complete text of the news from daily The News Karachi, Dated April 03, 2005. But I would like to quote an statement made by Thug Moin Fudda before the PAC (Public Accounts Committee) where he blamed small investors saying,"It was them who continued to invest money in the stocks because of their greed and in a hope to become rich overnight".
Can some one tell me which POOR or lower class citizen in Pakistan has Millions of Rupees to invest in stocks or any other business? If he does, he is not poor but is a THUG and FILTHY RICH.
I WOULD SUGGEST, EVERY ONE WRITE A LETTER TO PRESIDENT MUSHARRAF & THE PRIME MINISTER ASKING THEM TO SEEK RESIGNATIONS FROM SECP CHAIRMAN
DR. TARIQ HASSAN AND KSE M.D THUG MOIN FUDDA.
HERE IS THE TEXT:
Sunday April 03, 2005-- Safar 23, 1426 A.H.
ISSN 1563-9479
Stock market crash
Startling revelations in SECP grilling
By Rauf Klasra
ISLAMABAD: Startling revelations were made on Saturday in a meeting held by the Public Accounts Committee, where they summoned Chairman Security Exchange Commission of Pakistan (SECP) Tariq Hassan, chairmen of country’s three stock exchanges and other experts, to explain the unprecedented crash of the Karachi stock market .
The meeting was presided over by Malik Allah Yar and attended by MNAs Chaudhry Nisar Ali Khan, Asia Azeem, Qamar Zaman Kaira, Liaqiat Baloch, Hafiz Hussain Ahmed and others.
Asia Azeem, one of the members of the PAC, asked the chairman SECP and other concerned officials present in the briefing whether it was true that one broker of Karachi stock exchange had earned Rs 1 billion profit out of the crash market crisis. Neither the chairman SECP nor any of the persons making the presentation denied the occurrence.
The PAC grilled all top officials of Securities Exchange directly concerned and related to stock markets business, asking them about their responsibilities in such crisis-like situations and what measures they had taken to regulate the stock markets to ensure fair play for every investor. They were also asked if any of them had tried to stop manipulative forces and ‘major operatives’ who were looting the people in the name of investment and profit.
Chairman SECP Tariq Hassan, three chairmen of Islamabad, Karachi and Lahore stock exchanges and other concerned experts put the blame squarely on the shoulders of small investors who lost their Rs 150 billion. They said it was the fault of small investors who entered future markets business in the hope of becoming rich overnight. However, despite repeated requests of PAC members, SECP chairman Tariq Hassan, who bore the brunt of the PAC team’s criticism, refused to divulge the name of ‘big fishes’ of stock markets who had looted small investors.
In his presentation, he only mentioned that some ‘major operators, banks, DFI and NBFC had purchased shares in the ready market and sold them in the future market’. He was not ready to tell the committee who the ‘major operators’ were. He rather challenged the authority of PAC, saying theirs was not an inquiry committee and it had no jurisdiction to ask such scathing questions. Later, he promised to give the names after the report of his task force was finalised.
Nisar and Baloch blasted the SECP and said it had remained insensate to the plight of small investors who lost billions in just three days. They behaved in a callous manner and witnessed the huge exploitation of the poor by unscrupulous big fish whose identity was kept a closely guarded secret.
In the presentation, the SCEP officials told the committee that it was possible that the market participants deliberately sold shares in the market in excessive buying positions by several brokers in the futures market, who were not able to get an exit opportunity.
Chairman LSE said the crisis was created by those investors who were busy with their shares in the future markets. He said as such no big losses were reported from Lahore because no such future trade was done in Lahore. He said the decline in the market needed to be investigated.
The SECP apprised the committee that future market was a relatively new concept in the country, which remained low over the last two years. However, trading in the market started picking up since January 2005.
He said in March 2005, heavy volumes were witnessed over the future counter. It came to our knowledge that some major operators, banks, DFIs, NBFCs purchased shares in the ready market and subsequently sold them in the future market."
The PAC was told that downfall in the index was mainly because of substantial decline in share prices of OGDC, PTC, PSO, POL, NBP and PPL. It was informed that OGDC alone pushed the index down by 44 per cent, PTC by 15 per cent, PSO by three per cent, POL by two per cent and NBP by four per cent.
The KSE saw a bearish trend since March 16 and the KSE 100 index dropped to as low as 7,708 on March 28 showing a decline of 25 per cent from its peak of 10,303 on March 15.
The stock exchange chairmen and government officials shifted the blame on the shoulders of small investors and termed them greedy. They said these people wanted to become rich overnight and were investing their money in the hope of short-term benefits.
Tariq Hassan said there was no room for cancellation of the contracts signed in the stock markets during the period March 15-18, which according to Baloch, it had actually caused the collapse of the market.
Yasin Lakhani of Karachi Stock Exchange made the startling disclosure that beside students, girls and housewives, "even the sons of certain judges of High and Supreme courts had been investing in stock markets of the country to get rich overnight."
However, he was neither asked nor did he give the names of the judges whose sons were allegedly involved. But, he claimed that he had stopped the sons of the judges from this business. Lakhani was of the view that greed was leading the investors to do speculative business which had resulted in major losses.
Managing Director KESC Mr Moin Fita said people were blindly investing in the market without having any idea about its functioning and operations.
The committee dismissed the presentation of SECP on the causes of unprecedented crash of stock markets as "half cooked and a pack of lies", which had confused the scam of stock market crash rather than helping them to understand who had benefited from this market manipulation.
They rejected the claims of SECP chairman that SECP had been making rules to regulate the market in the past as they questioned that if their previous measures could not stop this scam happening then how could one expect that it would work in future.