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Suspension of memberships at KSE: CEO, not owner, placed on ECL

The suspension of memberships of five brokerage firms of the Karachi Stock Exchange (KSE) is taking new turns and twists as the name of a nominee director and chief executive officer of one of the suspended brokerage company was put in Exit Control List (ECL), instead of its owner.

The name of Zafar Habib, Nominee Director and CEO Clicktrade, one the brokerage firms whose membership was suspended by the apex regulator on June 30, 2009, has been placed in ECL instead of its owner and major shareholder Hanif Peerani.

Addressing a press conference at the Karachi Press Club (KPC) on Wednesday, Habib and another director Shehzad accused Haneef Peerani and Chief Financial Officer (CFO) Syed Wajid Ali of misappropriating and embezzling over Rs 200 million of clients’ investments.

They disclosed that both Peerani and Ali have shareholding of 94 percent and five percent respectively and entire portfolio of the company’s clients was pledged by these two to fund their personal losses by taking loans against the pledged shares for their personal benefit.

They said that clients skeptical of Peerani and Ali started lodging complaints against the company with the Securities and Exchange Commission of Pakistan and the. “I asked them to inject funds for disposal of clients’ complaints. However they didn’t bring in any funding and the company’s situation came to a standstill by end of June when SECP suspended its trading rights,” they added.

They said that after misappropriating the huge funds of clients, Peerani disassociated himself from the company by advertising in newspapers that he has nothing to do with Clicktrade, whose 94 percent shareholding is owned by Peerani.

They alleged that SECP and KSE are very well aware of the main culprits who embezzled the clients’ investments and proofs have been given to authorities of the two institutions. However, there is no action on part of the authorities and the main culprits are roaming freely whereas the name of Habib, the employee of the company has been put in ECL.

They said that KSE has given the deadline of August 12, 2009 to settle the amount of clients’ investments otherwise their card would be sold. However they said that more than 20 percent of the company creditors and shareholders are in favour of revival of the company to safeguard the clients’ investments and return their dues through recovery from absconding directors Peerani and Ali.

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