Much ado about KSEs leadership

If things move the way they are currently heading, the Karachi Stock Exchange could find two of its top offices empty.
The tenure of the bourses current MD, Adnan Afridi, is due to end this month, and news reports suggest that he will not be pursuing a second term on account of his other commitments beginning later this year.
Afridis stint at KSE is somewhat like Afridi, the cricketer. There are those who adore him, and those who don .
In the latter camp, critics argue, on the condition of anonymity, that he was an expensive MD, who failed to deliver for the price (and bonuses) he took. Most of the criticism revolves around his alleged mismanagement of the 2008-crisis and his supposed failure to get tax benefits for the market in testing times. Others cite his inability to push for a margin trading system.
In the former camp, the likes of Arif Habib, a senior KSE broker, there are no such complaints. "He has done very well," says Habib, adding that "of all the MDs in KSEs recent history, he was probably the best who had both technical knowledge and adequate experience."
Other Afridi fans share Habibs view almost verbatim, but they do argue that Afridi probably didn have the personality to exert pressure. "He had a dheema mizaaj (gentle personality), owing to which he probably couldn get some things done," said another senior market participant, who otherwise was satisfied with Afridis overall performance.
But let bygones be bygones. What the future demands, in terms of filling Afridis shoes, is perhaps best summed up by Ahsan Mehanti, CEO of Shehzad Chamdia Securities.
"Taking that position (KSEs MD) in todays market situation has become even more challenging; it requires a very competitive person who understands market dynamics, who is non-partisan, and who can take the right decisions," says Mehanti.
Unlike the MDs slot, however, the case of KSEs chairman is both controversial and complex.
Ticked off by Zubyr Soomros - the bourses current non-broker chairman - note of dissent in the whole margin trading drama, KSE brokers are meeting early next month to resolve that KSEs chairman should be a broker.
Arguing in favour of a broker-chairman, Arif Habib says that a broker-chairman will understand the market well and support the member directors if and when the situation requires. "He needs to have a stake in the market to be able to make better voting decisions," says Habib.
When asked about a potential conflict of interest, considering that KSE also performs some regulatory functions, Habib said, "No. Any rule and regulation proposed by the KSE needs to get the SECPs approval, which, in effect, means that the issue of a conflict of interest is eventually addressed."
Others such as Farid Alam, CEO of AKD Securities, argue that there are pros and cons for and against both sides.
"Historically in the tenures of broker-chairmen there have been certain untoward issues, which are now almost common knowledge. But, on the flipside, a non-member chairman is often short of time or lacks expertise, and also they don even have any stake in the market," asserts Alam. "I would prefer a non-member chairman, but someone who is competitive," he added.
These conflicting views within the industry create a perception that the whole issue is probably a child of bloated egos. "I don think that we should be focusing on such matters when there are real issues to be dealt with such as market development and MTS to name just a few," Alam points out.
Alams argument makes sense, especially considering that the SECP is not likely to give it up that easily on the chairman issue, and that there could be prolonged legal battles between the two sides.
Avoiding a stand-off, therefore, should be high on the agenda. Sources reveal that the stakeholders are due to meet Shaukat Tarin, the former finance minister and former KSE chairman, on Monday to seek his advice on the matter. In this context, consulting other market elders like Amin Issa Tai and Feroz Cassim can also potentially bear fruit.
In the meanwhile, the candidates eyeing these two vacancies should start updating their resumes.