As a small investor in this country I appreciate the sincere efforts of the Government of Pakistan, the Privatisation Commission and Securities and Exchange Commission for looking after critically the welfare of small investors by introducing certain rules and regulations to streamline the working of the stock exchanges of the country.
But it is a matter of great concern that a particular group is trying hard to jeopardise the efforts of the Government, especially some stock brokers, their agents and small banks are involved in this unhealthy practice.
When any new IPO is announced, this group comes into action with full force to collect its benefits as a whole, instead of passing the same to the general public. Thousands of bogus and fake applications are submitted without having proper bank accounts in designated banks. Often a single person collects the identity cards of his servants, friends and relatives and submits the same in quantity of hundreds.
Such practice deprives so many small investors to get benefit from the recently-launched IPOs by the Privatisation Commission.
If a careful data is collected, the situation will be very clear. The number of applications lodged through the big banks having more than 300 branches in the country is much less than a small bank which is having just 30 branches in the whole country. Does it justify?
The practice being done is that these small banks issue pay orders for each application in different names. After the balloting when the return of unsuccessful applications comes back this is credited into only one account, instead of going to respective accounts shown on the application. (Ac. Nos are usually fake).
Recently the SECP has ordered to close CDC group accounts from 31.3.2005. This is a nice decision as all the corruption being done is from these accounts. This will definitely check the quantity of false applications, but more steps are essential should be taken urgently to save the interests of the small investors and check this application MAFIA.
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