Pakistan Stock Exchange gets a new MD

KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has approved the appointment of Canadian national Richard Morin as Pakistan Stock Exchange (PSX) Managing Director & CEO after recommendations from its Board of the Directors, the sources in SECP said here on Monday.

Richard Morin may join PSX from December 1 or before this date as Haroon Askari will continue his job as Acting MD till November 30, 2017.

Despite all the opposition of the brokers and incomplete board of the PSX, the chairman Board of Director (PSX) sent proposals for the appointment of Richard Morin to the SECP after its last meeting held on September 24, 2017, and SECP approved the recommendations of the BoDs.

The SECP source said, “The Board of Directors of PSX unanimously recommended the appointment of Morin for the approval of SECP under the regulations which was approved by the SECP subject to completion of formalities.”

“The PSX after following due process as required under the Securities Exchanges (Licensing and Operations) Regulations, 2017 (the “Regulations”) and in terms of the Fit and Proper Criteria had shortlisted Richard Morin for appointment as its Chief Executive Officer,” the SECP official said.

“There are only three directors supported by local brokers,” the source in the equity market said. The BoDs has to appoint another director for which two names are circulating, but both are brokers and according to new rules, the brokers cannot join the director seat in BoDs. However, some of the brokers said that there is no objection if they nominate foreign national as CEO of PSX.

The existing board members had already approved the appointment of Canadian National Richard Morin on July 2017.

Through a notification, the BoDs have appointed Acting MD Haroon Askari, after completing tenures of Nadeem Naqvi, till the appointment of new MD of the PSX.

The Chinese PSX’s Board members Que Bo, Zhiping Rong, Yu Huali and Li Peng were very keen in his (Morin) appointment, the source said.  According to the PSX officials that PSX has given full rights to Chinese shareholders to nominate candidates for the top three positions in the market i.e. Managing Director, Chief Financial Officer and Chief Regulatory Officer.

The independent directors of the board are Samir Ahmed, Rahat Kaunain Hassan, Tawfiq A Hussain and Mohd Naeem, while elected directors are Abid Ali Habib, Shahzad Chamdia and Ahmed Chinoy. Munir Kamal who is the Chairman of the Board and Moin Fudda is the board member nominated by the SECP.

A leading broker said, “There is no representation of the local brokers in the PSX Board and most of the independent directors have been nominated by the SECP.” The dispute on the appointment of most prominent Director Abid Ali Habib has been resolved as he had resigned from his father’s brokerage firm.

According to the brokers, the participation of brokers should be strong as we still have 40 per cent shares in PSX while there should also be two more directors to represent independent shareholders.

The PSX official said, “all the directors have been appointed with the recommendations of the PSX board and the brokers,” therefore, there is no question of like or dislike. “They are members of the board, but Securities and Exchange Commission of Pakistan (SECP) and PSX board members are still looking for remaining one director, he added.

The brokers of PSX had sold its 40 per cent shares to a Chinese Consortium but after the severe opposition against the appointment of Canadian national, the new management of PSX not only brilliantly handled the situation and heard the local brokers, the source said.

The Chinese consortium comprises three Chinese exchanges; China Financial Futures Exchange Company Limited (lead bidder), Shanghai Stock Exchange and Shenzhen Stock Exchange.

The brokers, showing their concern over the unofficial appointment, said the Canadian national would unnecessarily cost more to the company, the PSX, as he is being appointed at a huge salary and is also being given special perks, including residential allowance and international travelling expenditures.

According to a source, Richard Morin has been appointed on a salary package of Rs 4 million (approximately $ 40,000) excluding the allowances, three-time higher compared to previous managing director.

A SECP official, confirming the appointment, said they have received a formal request from the Board of Directors, which they approved but it is subjected to completion of all formalities for his appointment according to the rules and regulations of the PSX and country’s law and procedures.

Morin had served at Canadian stock markets and the Stock Exchange of Mauritius. He has worked at several brokerage houses and asset management companies.

Earlier, Nadeem Naqvi served as the MD PSX for six years. The PSX board of directors appointed him to the post in April 2011. The new managing director’s appointment is being made at a time when the PSX’s benchmark KSE-100 Index is struggling to recover from a steep correction.