NAB initiates inquiry against two brokerage houses

On the complaint of Securities and Exchange Commission of Pakistan (SECP), the National Accountability Bureau (NAB) has taken action against MR Securities (SMC-Private) Limited (MRSPL) and AWJ Securities Private Limited.

The two brokerage houses registered with SECP have been complained against for non-transfer/non-delivery of Securities and non-payments of cash to the investors. It has been alleged that MR Securities (SMC-Private) Limited (MRSPL) and AWJ Securities Private Limited brokerage house’s directors along with the management have cheated investors at large through fraudulent means.

On Feb 9, 2017, Lahore-based MR Securities was declared a defaulter after its owner, Mazhar Rafiq, disappeared with investors’ money. While AWJ Securities, owned by a former chairman of the Islamabad Stock Exchange (now integrated into PSX), Abdul Waheed Jan, was among the defaulters and weak survivors of the 2008 mega stock crisis. During the initial investigation, it was revealed that Mazhar Rafiq is the son-in-law of the prominent businessman and real estate mogul, Seth Abid.

Chairman NAB Qamar Zaman Chaudhry, on NAB’s official website said that he has taken a serious notice of the matter and has ordered NAB’s Islamabad, Rawalpindi and Lahore divisions to conduct a thorough inquiry on the complaint under NAO-1999, following under their respective jurisdiction. Earlier, in line with chairman NAB’s firm resolve and commitment to eradicate corruption and corrupt practices from the country, NAB and SECP had created a Joint Task Force comprising senior level officers of NAB and SECP, in order to work expeditiously on corruption cases referred by SECP to NAB.

The banking circles of the Federal Investigation Agency (FIA) had also arrested a broker who was running two books, the sources said. In the press release issued by the PSX, it said that in some cases, it has also come to light that the investors themselves have given loans to brokers and received fixed monthly returns, which is a completely illegal activity by both the parties under the relevant regulations.

Investors must also be aware that brokers are not allowed to obtain loans from investors in any form and pay a fixed return. That is an illegal action, the PSX claimed.

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Arshad Hussain
Arshad Hussain
The author is business reporter at Pakistan Today. He can be reached at [email protected] He tweets @ArshadH47736937
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