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Pakistan Tehreek-e-Insaaf’s senior leader Jahangir Tareen was found guilty of an insider trading, eight years ago. Although, he has returned Rs70 million that he made illegally, informed the apex court on Tuesday.
As the three-judge bench of the apex court is set to resume hearing of the case which was filed by PML-N’s leader Hanif Abbasi, to seek ban on PTI’s general-secretary on Wednesday. Amid the hearing, the Securities and Exchange Commission of Pakistan (SECP) has submitted a concise statement, which may give this case an interesting level.
The statement by the SECP asserted that Tareen disrupted the Insider Trading Ordinance-1969 and the Companies Ordinance-1984 in the United Sugar Mills (USML) acquisition. “He also made roughly Rs71 million gains but returned Rs73.1 million to the SECP — including fines and legal cost that the regulator incurred on investigating the case.”
The statement was rejected by Jahangir Tareen, saying that no “admission” or “confession” as ever made by him in relation to the subject.
The SECP has further said that Jahangir Tareen Khan being director of the JDW was authorized by its board of directors to negotiate the acquisition of the USML. Hence, he was ‘in the know’ of all the inside information during the acquisition of the USML, and consequently made a hefty gain of Rs70.811 million in violation of Section 15A of the Securities and Exchange Ordinance-1969.
“The unusual trading pattern and price movement in the shares of the USML from November 2004 to November 2005 was observed by Jahangir Tareen Khan and investigation under Section 29 of the SECP Act 1997 was ordered on December 12, 2006.”
“The investigation report revealed contravention of Section 15A of the Ordinance of-1969, sections 214, 216, 217 and 222 of the Companies Ordinance-1984 and Section 4 of the takeover Ordinance.”
Furthermore, the statement revealed that Tareen acquired 341,780 shares through M/s Haji Khan and Allah Yar and made a gain of Rs70.811 million through the sale of his shareholding in the USML, in the stock market and under the public offer made by the JDW in October 2005.
Later, the SECP through a letter dated December 3, 2007 asked Tareen to explain his position regarding the accusations that had started to surface against him, for such unlawful gain. Tareen submitted his reply to this letter, where he stated that, “in view of the alleged violations pointed out by the SECP, I admit it does seem possible that some provisions of law may have unwittingly been contravened.”
The PTI general-secretary voluntarily offered to return his illegal gain of Rs70.811 million, recoverable under Section 15-B (3) of the Ordinance of 1969 along with maximum fine of Rs1.258 million under sections 214, 216, 217 and 222 of the Companies Ordinance 1984 and Section 4 of the takeover ordinance.
The SECP’s January 11, 2008 letter, Tareen was directed to deposit the illegal capital gain made out of insider trading along with all fines applicable for contravention of the relevant provisions of laws.
The SECP has praised the role played by the apex court saying that it ran the probe of the entire matter very vigilantly, which concluded as return of entire illegal gain and recovery of penalties for contravention of relevant provision of laws.
“It is respectfully prayed that this honourable court may decide the case as deemed appropriate.”