Report: Ikram Ullah Joyia/ANI
ISLAMABAD — The Securities and Exchange Commission of Pakistan (SECP) has approved sending a formal reference to the Federal Investigation Agency (FIA) for legal action in the Bagsra Securities case. More than 16 years after the closure of Bagsra brokerage company, approved claims of several investors amounting to nearly Rs 50 million are still outstanding.
The Commission approved the reference under Section 41-B of the SECP Act, 1997, following which the FIA will proceed with formal legal proceedings over allegations that investors’ shares were transferred and pledged without their consent.
The SECP initiated an inquiry in March 2010 following complaints from investors. The inquiry, completed in October 2013, found that clients’ shares had been transferred and pledged without their consent to obtain loans and meet trading margin requirements. The funds obtained were allegedly used to benefit certain selected clients at the expense of others.
According to the investigation, more than 176.2 million shares, including clients’ shares, were pledged between July 2007 and March 2010. Following the brokerage house’s failure to repay the loans, banks and the stock exchange sold the pledged shares. The National Clearing Company and the Stock Exchange subsequently declared Bagsra Securities a defaulter.
The Pakistan Stock Exchange verified claims of 333 investors amounting to Rs 145.5 million and initiated the process of settling the claims through the sale of the company’s membership card. Of the total verified claims, Rs 96.570 million has been paid, while Rs 48.930 million remains outstanding.
The SECP’s reference to the FIA is aimed at advancing efforts to recover the investors’ outstanding dues and facilitate settlement of claims of those who have been awaiting payment for more than 16 years.
