KARACHI
Despite severe opposition from the Pakistan Stock Exchange (PSX) brokers, the PSX’s board is going to finalise the appointment of Richard Morin as Managing Director PSX on Wednesday (September 27), it is learnt here on Tuesday.
The existing disputed board members had already approved the appointment of Richard Morin, Canadian National in July 2017. On Wednesday, the board will give final approval of the appointment, the source claimed. On October 24, this matter would be put before all the stakeholders including the brokers, he added.
The PSX’s Chinese board members Que Bo, Zhiping Rong, Yu Huali and Li Peng were very keen on his (Morin) appointment, the source said. According to the PSX officials, 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 board of directors are, Samir Ahmed, Rahat Kaunain Hassan, Tawfiq A Hussain and Mohd Naeem, while elected directors are Abid Ali Habib and Ahmed Chinoy. Board Chairman Munir Kamal and Moin Fudda are the board members nominated by the Securities and Exchange Commission of Pakistan (SECP).
A number of brokers in the PSX opposed the appointment of a Canadian citizen as the managing director, following a 40 per cent takeover by a Chinese consortium.
A top 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 appointment of two most prominent directors, Abid Ali Habib and Ahmed Chinoy is also disputed according to the new rules and regulations.
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.
However, 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 SECP and PSX board members are still reviewing the disputed directors, he added.
The PSX sold its 40 per cent share to a Chinese consortium but the arrangement relationship seems to have hit its first real stumbling block with some brokers and members of the PSX opposing China’s nomination.
The brokers, expressing their concerns over the unofficial appointment, said the Canadian national would unnecessarily cost more to PSX as he is being appointed at a huge salary along with special perks, including residential allowance and international travelling expenditure.
According to a source, Richard Morin has been appointed on a salary package of Rs 4 million (approximately $ 40,000) excluding allowances, three-time higher compared to previous managing director.
In addition, a senior broker said, “I joined the stock market some 40-45 years ago with my grandfather and now a Canadian MD will teach us how to trade in the stock market, what a joke with Pakistani brokers.” Actually, we have to teach a foreign national about “our national culture” and especially, the “stock market culture,” he added.
The stock market mostly operates on personal relationships and Morin lacks that, a broker claimed.
A PSX official confirming the appointment said they have not received any formal opposition from the brokers or members, who have the right to have their personal opinions.
Only the shareholders of the company (PSX) have the right to accept and reject and approve and disapprove of his appointment and monthly package. They may do this at the forthcoming annual general meeting likely to be held on October 24, the official explained. However, the full board of directors has the power to finalise appointments.
He said Morin is a professional and experienced official. He has served at the 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 managing director for six years. The PSX board of directors appointed him to the post in April 2011. Following the completion of Naqvi’s tenure, Haroon Askari was made acting managing director in June 2017.
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.
Despite a slim recovery to 42,666 points till Tuesday (Sept 26), the index touched 52,876.46 hit on May 24, 2017.
