SECP refers Blink Capital Management case to FIA over alleged Rs446.6 million fraud

The Securities and Exchange Commission of Pakistan (SECP) has referred the Rs446.6 million fraud case of M/s Blink Capital Management (Private) Limited to the Federal Investigation Agency (FIA) for further investigation and appropriate action under the law, according to a SECP statement on Saturday.

Blink Capital Management was a licensed futures broker and market maker of the Pakistan Mercantile Exchange Limited (PMEX). The SECP initiated an investigation under Section 83 of the Futures Market Act, 2016, following complaints from investors alleging unauthorised collection of funds on promises of fixed returns and guaranteed repayment of principal.

“The investigation revealed that 35 complainants lodged claims amounting to Rs446.664 million. A detailed financial trail involving 29 complainants and Rs408.6 million showed that substantial funds were transferred to accounts of Blink, its then CEO and director, as well as accounts linked with certain employees and associated persons. Significant amounts were also withdrawn in cash.

“The investigation found that investors had entered into agreements offering predetermined returns ranging from 3.7% per month to 48% per annum, with post-dated cheques issued as security. Based on the available evidence, the investigation concluded that Blink was allegedly operating a Ponzi-type fraudulent investment scheme, involving illegal deposit-taking and offering guaranteed returns beyond the scope of its licensed activities,” the SECP said.

The investigation identified potential violations of the Companies Act, 2017, the Futures Market Act, 2016, and the Futures Brokers (Licensing and Operations) Regulations, 2018.

“Considering the gravity of the findings, the commission approved referral of the matter to the FIA under Section 41B of the SECP Act, 1997, for further investigation and redressal of investors’ grievances in accordance with law.”

Chairman SECP Dr Kabir Ahmed Sidhu said the commission would deal strictly with market abusers, manipulators and entities misusing their regulated status to deceive investors.

“Safeguarding investors’ interests is paramount. SECP will pursue those who abuse the market or investors’ trust, and will take all necessary regulatory and enforcement actions to protect investors and preserve market integrity,” he was quoted as saying in the SECP statement.

SECP advised the public to exercise caution against unauthorised investment schemes, particularly those offering fixed or guaranteed returns.