SECP files complaint against six companies


ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint in a court against six companies and 17 individuals, which it says are involved in manipulation of Azgard Nine Limited (ANL)ís share price and volume.

A court has† issued bailable warrants of all accused persons, the SECP said in a press release on Wednesday.

The list of accused includes JS Global Capital Limited, Jahangir Siddiqui & Co Limited, Jahangir Siddiqui & Sons Limited, Jahangir Siddiqui Securities Services Limited, JS Investments Limited, Aziz Fidahussain & Co Limited, Saad Saeed Farooqui, Mehboob Ali Kalyar, Muhammad Sadiq Patni, Shazia Sadiq, Syed Nizam Shah, Humayun Shaikh, Alia Sheraz Monoo, Amna Humayun Shaikh, Nasreen Shaikh, Ahmed Shaikh, Muhammad Riaz, Muhammad Ijaz, Irfan Aziz, Saba Irfan Aziz, Zehra Nazim Aziz, Mohammad Iqbal and Muhammad Mubashir Hameed Dagia.

According to the SECP, an analysis of trading data of the Karachi Stock Exchange disclosed that during 73 trading sessions between April 2, 2007 and July 13, 2007, there were unusual hikes in trading volume and price of ANL share. The data reflected an abnormal average daily trading volume of 3.5 million shares, reaching the peak at 10.8 million shares on April 20, 2007.

The average daily volume during the period reflected an increase of 2.3 million shares (65%) as compared to the average trading volume of 1.2 million shares for the preceding 12 months.

During this period, the price of ANL share increased by 132%, with a peak at Rs52.5 on July 3, 2007 against the average price of Rs22.85 prior to the said period.

This prompted the Commission to initiate an investigation in November 2007 under Section 21 of the SECP Ordinance read with Section 29(2) of the SECP Act, 1997.

The SECP said as the investigation was underway, again during 96 trading sessions from November 29, 2007 to April 22, 2008, another surge in the average daily trading volume and price of ANL scrip was observed.

The trading volume increased to the daily average of 5.8 million shares and on January 18, 2008 it reached a highly unusual volume of 16.8 million shares and the price rose from Rs36.60 (closing price on November 28, 2007) to Rs96.40 (closing price on April 21, 2008), reflecting an increase of Rs60.55 ie 168%.

Average trading volume and the price of ANL share dropped sharply in the following months.

The abnormal increase in the price and volume of ANL shares indicated manipulation, and trading data showed concerted buying and selling among clients of JS Global Capital and Aziz Fida Hussain & Company.

Courtesy: Tribune