ISLAMABAD (December 03 2005): The Islamabad Stock Exchange (ISE) has asked the Securities and Exchange Commission of Pakistan (SECP) to get three directors and chief executive officer of Mega Securities Private Limited on Exit Control List (ECL).

Suspecting mismanagement of the company's affairs, the ISE issued show-cause notice last month and suspended trading rights of the company for want of satisfactory response.

In a communication to SECP, Secretary of ISE stated that the office of the member was closed and directors and employees stayed away from the stock exchange.

According to ISE estimates, the company has deprived its account holders of about 60 million rupees.

Contacted by this correspondent, Chaudhry Aftab, Managing Director (MD) of ISE said on Friday that Mega Securities Private Limited has been summoned to explain its position in a board meeting of ISE scheduled for December 12. However, he said, justifications so far provided by the company were not satisfactory.

Most of account holders are small traders, who had invested in the stock exchange through the Mega Securities, said the official.

When contacted, Abdul Waheed Jan, chairman ISE, stated that due action against the ISE corporate member has already been undertaken. The assets and accounts of the company are being audited, he added. He said the ISE had already suspended the trading rights immediately after having received only a few complaints from the account holders.

The ISE chief said he was not aware whether the names of the four directors had been put on ECL. "It is, actually, the matter to be looked after by the SECP. We can simply request the SECP to take up the issue with the interior ministry," he added. The ISE authorities, he said, are in touch with the account holders. The negotiations are on, he added. The ISE chairman asked the account holders to formally lodge an FIR against the directors so that the law enforcing agencies could take necessary action against them.

He said that ISE could take legal action against the defaulter after completion of auditing process.

However, according to the official, the SECP is yet to intimate the ISE about the action it has taken against the directors of the member. There is likelihood that directors could flee the country if necessary action had not been taken, the official said. Around 150 account holders have submitted their claims with the ISE management against Mega Securities.

A large number of account holders who attended a meeting with the ISE authorities on Friday said that Mega Securities had shaken the confidence of the small investors. They accused that government had failed to protect their interests. Iqbal Hussain, Mohammad Adil Ayub, Laiq Mohammad Yusufzai, Mashood Ahmad, Jalil-ur-Rahman and some other account holders said that the process of initiating action against the Company is very slow. "We fear that defaulter will flee the country if due action is further delayed," they said.

Copyright Business Recorder, 2005