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REFERENCE / COMPLAINT NO. 11/2006
Reference dated August 8, 2006 – Stock Market Crash
The Chairman
National Accountability Bureau
Islamabad
Pakistan Peoples Party ---------------------------------------
COMPLAINANT
VS
1. Mr. Shaukat Aziz, Prime Minister of Pakistan / Federal Minister for
Finance, Prime Minister House, Islamabad
2. Mr. Omar Ayub Khan, State Minister for Finance, Government of Pakistan,
Pakistan Secretariat, Islamabad
3. Dr. Salman Shah, Advisor for Finance, Government of Pakistan, Pakistan
Secretariat, Islamabad -------------------------------------------------
ACCUSED / RESPONDENTS
Subject: COMPLAINT UNDER SECTION 5 AND 18 (B) SUB SECTION-II OF THE
NATIONAL ACCOUNTABILITY BUREAU (NAB) ORDINANCE 1999, AGAINST THE HOLDERS OF
PUBLIC OFFICE FOR PUNISHMENT UNDER SECTION 10 OF NAB ORDINANCE FOR CAUSING
HUGE FINANCIAL LOSS TO THE NATIONAL EXCHEQUER BY CORRUPTION AND CORRUPT
PRACTICES.
FACTS AND GROUNDS:
1. That the respondents were deeply involved in misusing official powers as
against the law of the land as reported in daily “The Dawn” dated 8-7-2006,
in crash of stock exchange scam of billions rupees during the years 2000,
2001, 2002, 2005 & May 2006 by respondent No 1 as Federal Minister for
Finance and later as the Prime Minister of Pakistan and respondent No 2 & 3
during the years 2000, 2001, 2002, 2005 and 2006 as State Minister for
Finance and Advisor to Finance Ministry.
2. That a multi billion Rupees scam has hit the Stock Market as Mr. Tariq
Hassan, Ex Chairman, Security Exchange Commission of Pakistan (SECP)
disclosed and quoted from Shakespeare’s Julius Caesar : “The fault, dear
Brutes, is not our stars, but in ourselves that we are underlings”, before
the National Assembly Standing Committee on Finance and Revenue in Islamabad
on Friday 7th July 2006, that both the respondent No 2 & 3 had close links
with the powerful brokers involved in the Stock Exchange Scam and
pressurized the Ex Chairman SECP not to take action against the brokers
involved in the scam. The Ex Chairman also told the National Assembly
Standing Committee that he had reached a few big fish but could not net them
because the powerful brokers had excess to the respondent No 1 through the
respondent No 2 & 3.and also provided a list of 21 key brokers involved in
the Stock Exchange Market was presented to the National Assembly Standing
Committee on Finance and Revenue as printed in the daily “The News” dated
10-7-2006.
3. That the disclosure before the National Assembly Standing Committee on
Finance and Revenue by the Ex Chairman of the Market’s watchdog body was the
clearest evidence of corruption at the top in State functionaries in the
mega robbery of 800 billion rupees of ordinary investors. It would be a
great scandal if National Accountability Bureau (NAB) initiated
investigation in the years 2000, 2001, 2002 or 2005 and finally 2006 but
perhaps all high ups were involved in this scam and receiving their share
and poor people will continue to be robbed if no action was taken.
4. That the Ex Chairman told the National Assembly Standing Committee on
Finance and Revenue that since powerful people protected the brokers
involved in the 2005 Market crash, they were emboldened to cause another
crash recently wiping out another scores on billions of ordinary investors.
5. That it said those found involved in wash trading were Moosati Security,
Aqeel Karim Dady, World Wide Security, AHKD Security, Munir Ahmed Kanani,
Moti Wala Security, and Anas Kaparia. Brokers found involved in Badla
financing were Arif Habib Securities, Aqeel Karim Dady, Atlas Investment,
DGM Securities Limited, Bank Investment, Kasab Securities, Datsun Limited,
First Capital Equity, Motiwala Securities, ME Securities, Jhangir Siddique,
Akber Ali Qasim, M Hasnain and First Equity, as stated in daily “The News”
dated 8-7-2006.
6. The above facts have been published in-the followings newspapers :
i. The Dawn” dated 8- 7 -2006
ii. “The News” dated 8-7-2006
iii. “The News” Editorial dated 10-7-2006
7. That the respondents in this complaint do fall within the ambit of NAB
Ordinance 1999 for the purpose of investigation, trial and punishment.
8. That the respondents are reportedly guilty of corruption and corrupt
practices, as Prime Minister and Finance Minister, Respondent No1, State
Minister for Finance, Respondent 2 and as Advisor for Finance, Respondent 3
abuse of powers, as defined in Section 9 of the NAB Ordinance and as such
they are subject to punishment under Section 10 of the NAB Ordinance 1999
based upon the above facts and grounds.
CONCLUSION:
Based on the above facts and grounds, the respondents have shown willful
indulgence in misusing their powers under Section 9 of the NAB Ordinance.
Such persons are subject to punishment under Section 10 of the NAB Ordinance
1999.
As such the Chairman of the National Accountability Bureau is called upon to
initiate investigation in connection with the matters set out hereinabove
and further proceed to file a Reference against the respondents for
violating the provisions of Section 9 of the NAB Ordinance punishable under
Section 10 of the NAB Ordinance in competent court of law and proceed
against the concerned for violating Section 9 of the NAB Ordinance 1999.
Complainant
Pakistan Peoples Party
Through:
Amjad Iqbal Qureshi
Advocate
Islamabad: Dated: 8th August 2006
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Big fish’ allowed to escape net: Tariq: Ex-chief of SECP issues ‘white
paper’
”The Dawn” dated July 8,2006.
ISLAMABAD, July 7: Former chairman of the Securities and Exchange Commission
of Pakistan (SECP) Dr Tariq Hassan on Friday issued a ‘white paper’ on the
March 2005 stock exchange crash, and claimed he had reached close to a ‘few
big fish” when he was shown the door.
“The last orders on my table, when I was removed from my post on Eid day,
was the appointment of forensic investigators to probe the few big brokers
held responsible by the task force (for the crash),” Mr Hassan told
reporters after presenting the so-called white paper to the National
Assembly’s Standing Committee on Finance and Revenue.
The committee at its meeting, presided over by Chaudhry Anwar Ali Cheema,
ordered the appointment of another team of forensic investigators to probe
reports about involvement of 11 high-profile brokers in the Karachi Stock
Exchange crash.
The team will be presenting its report to the committee within 10-12 weeks
after which those found responsible might be brought to book. Their names
are also likely to be put on the Exit Control List.
“They (the government) have no other option but to continue with the reforms
I had initiated but was not allowed to complete. The moral pressure on them
is building and compelling them to get hold of the big fish. Otherwise, I
fear form will prevail over substance,” said Mr Hassan while commenting on
the committee’s decision to proceed with the probe.
MNAs from the ruling party and opposition quoted Mr Hassan as saying in the
meeting that he would never retreat from his stand that he had not been
allowed to go ahead with reforms.
The former SECP chairman asked how could he get hold of those powerful
brokers who, he alleged, had access to the prime minister.
During the nine-hour meeting, Dr Hassan faced tough questions from the
Minister of State for Finance Omar Ayub Khan and Prime Minister’s Adviser Dr
Salman Shah, apparently because he had mentioned their names in letters he
had sent to the prime minister and accused them of pressurising him not to
replace Carry-over Transaction with margin financing, one of the main causes
of the crash.
When Dr Hassan was busy answering journalists’ questions after the meeting
in the committee room, a government official approached him and asked him to
leave as Dr Salman Shah, Omar Ayub and incumbent SECP chairman Raziur Rehman
were to hold a news conference.
“Dear, you people have invited me to this meeting,” said Dr Hassan to the
official while leaving the room.
Ruling party MNA Kashmala Tariq told reporters that there was a threat to Dr
Hassan’s life because he had taken on some powerful people.
For the first 50 minutes of the meeting, Dr Hassan was not allowed to speak
and it was only after a protest by opposition MNAs that he was given an
opportunity to do so.
Starting his presentation, Dr Hassan quoted from Shakespeare’s Julius
Caesar: “The fault, dear Brutus, is not in our stars, but in ourselves that
we are underlings.”
SECP chairman Raziur Rehman was asked by Dr Hassan and Ms Tariq why had the
reform process had been stopped and why task force’s recommendations had not
been implemented, which resulted in another market crash.
Insiders told Dawn that at one point Mr Omar Ayub said he had taken strong
exception to Ms Tariq’s remarks when she said “our prime minister also
intervenes in our stock market”. Ms Tariq was replying to Mr Omar Ayub’s
comment that even the US president had intervened in the stock market on
various occasions.
Former KSE chairman Yasin Lakhani and Aqeel Karim Dhedi (AKD) were present
on the occasion.
OPPOSITION’S DEMAND: Members of the committee from the opposition, Mujeeb
Pirzada, Mohammad Laeeque Khan, Qurban Ali Shah, Khalid Iqbal Memon and
Sardar Ayaz Sadiq, at a separate press conference later, said the government
was responsible also for the market crash of May 2006.
They said the fresh crash took place because no action had been taken
against the influential brokers involved in the March 2005 crash.
The members demanded resignation of the prime minister for his alleged
intervention in the stock market affairs and links with some brokers, first
stopping the SECP chairman from taking action against manipulators and then
sending him home when he initiated reforms.
“During Shaukat Aziz’s era, first as the finance minister and later as the
prime minister, the country’s stock market has crashed in 2000, 2001, 2002,
2005 and May 2006. Therefore, we demand resignation of the prime minister,”
Mr Pirzada said.
They said the committee had decided that the stock market reform process
must go on. 
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