The Securities and Exchange Commission of Pakistan (SECP) filed a criminal complaint on Tuesday, against a person who manipulated the price of shares of Gauher Engineering Limited, now Drekkar Kingsway Limited.
As a result of an investigation, it emerged that the accused and his associates bought a major stake in Gauher Engineering Limited in 2014 at a very subsidised rate. Gauher Engineering, at that time, was on the Pakistan Stock Exchange’s defaulters counter. Upon resumption of trading, the accused placed significant buy orders to ramp up the price of shares. Subsequently, these shares were sold to market participants at higher prices to earn substantial gains.
The accused also used his private limited company, in which he and his family have the majority shareholding. It may be noted that market manipulation is a criminal offence under the Securities Act, 2015, liable to a punishment of imprisonment of either description for a term which may extend to three years, or a fine not exceeding Rs100 million or both.
It is the second criminal complaint filed by SECP within 14 days, which shows its firm commitment to its policy of zero tolerance towards market abuse and any malpractice in the stock market. SECP is trying its best to ensure transparency in the capital market and strengthen investors’ confidence.