KARACHI – Events at the Karachi Stock Exchange (KSE) have taken a disturbing turn as major market players are engaged in an apparent attempt to wield control over the country’s largest bourse through installing favoured individuals at the helm.
Naqvi is going to take charge of the equity market in the capacity of managing director against, what the market sources claimed, was the will of an ‘overwhelming’ majority of the stock members who wanted to see Haroon Askari fill the top slot permanently. Askari has been acting as a managing director of the KSE after his predecessor, Adnan Afridi, who is apparently blamed for the decline of the bourse, had resigned.
According to sources, a KSE board meeting which was held here at the stock exchange on Wednesday, had finalised and recommended the name of Naqvi to the Securities and Exchange Commission of Pakistan (SECP) for approval for replacing the incumbent Askari. Askari, sources said, was likely to be retained as a deputy managing director, a slot that, a broker said, was though not exited yet but could be created for the ‘experienced’ and therefore ‘popular’ acting MD.
“The SECP will approve and notify the name of Naqvi within the next couple of days,” sources told Pakistan Today. Sources pointed out that the KSE board, sticking to its recently initiated austerity plan to cut operational expenditures of the bourse, had also revised salary package of the managing director. In December last year, the KSE management had terminated the services of at least three general managers in a bid to tamp down on additional expenses of the KSE which, according to sources, was faced with a monthly financial loss of over Rs 10 million.
According to KSE’s Annual Report 2010, during the year under review comprehensive earning of the KSE had declined by 78 percent or Rs 239.451 million thus pushing total comprehensive income of the Exchange down to Rs 67.329 million against Rs 306.78 million of the last year. “The board decided to revise net salary package of the new MD down to Rs 1.2 million against Rs 3 million the former of MD used to take,” they added.
Speaking to Pakistan Today, a senior broker revealed that the former KSE MD used to pocket at least Rs 3 million every month through “manipulating the balance sheet.” AKD Securities former Chief Executive Officer Naqvi, is said to have all the qualifications required for filling the top KSE slot but some conspiracy theorists doubt his ‘loyalty’ to the equity market and question whether he will serve the interest of the organisation.
“He remained deeply involved (at the equity market) but who can confirm his loyalty?” a KSE member queried with concern. The member alleged ‘big’ influential brokers had brought the name of KSE in disrepute in their covert and overt bids to take control of the bourse. “An overwhelming majority of the KSE members believe that Askari is an extremely honest and knowledgeable man but he was not assigned as a de-jure MD because he is likely to resist the pressure of big brokers,” the member claimed.
Another stock member claimed that some big brokers after getting appointed the new SECP chairman of their choice were now bent upon bringing their own MD at the KSE’s helm. “The elected members, who fought to resist this influence, are now badly disappointed… big brokers are the source of defamation for KSE,” he alleged.
The impression seemed to carry some substance when an elected KSE board member, Abid Ali Habib was contacted declined outright to comment on the board’s recommendation on Naqvi. “I can’t say anything now,” the director replied and disconnected the line.
