KARACHI – Members of the Karachi Stock Exchange (KSE) have back-pedalled from their previous demand for a member-chairman at KSE following appointment of a former broker at the apex regulator, Securities and Exchange Commission of Pakistan.
The KSE members on Monday rejected the resolution, demanding the apex regulator to appoint a member chairman at KSE in the most-awaited extraordinary general meeting, held under the chairmanship of Director Abid Ali Habib. “A heated debate took place at the meeting, lasting for hours, with members split over the issue of a member-chairman,” a member broker told Pakistan Today. He said that some 85 members had originally participated in the meeting, however after prayer’s break, only 65 turned back and participated in the voting. Members have apparently acted contrary to their previous stance as many of them had now started to count on the newly-appointed former broker Muhammad Ali Ghulam Muhammad, as SECP chief.
“They believe, if given some time, the new SECP chairman would resolve their problems through dialogue,” said another member of the KSE. A senior KSE member told Pakistan Today that passage of the resolution could not ensure appointment of a member-chairman due to the complex procedure.
He said that, in case of its passage, the resolution was required to go to the SECP for an approval, which if denied would have left the members with no option but to go in litigation.
“The legal remedy is that affected parties go to the court of law and demand their right to amend the articles. However the process needs a long time,” the member said.
“Now the issue stands disposed off as the proposal could not secure the mandatory consent of 75 percent members,” the KSE member opined. The argument carries enough weight as the SECP has already expressed its opposition to a member chairman for the country’s largest bourse. In his first visit to the Karachi bourse, the SECP chairman had rejected the brokers’ longstanding demand.
The SECP chief, having a brokerage background, contended that appointment of a member-chairman would be in contradiction to good corporate governance and international practices. “Chairman of the board would continue to be from among the non-member directors,” Ali maintained.
