The former head of Faisal Bank (Investment Banking Group), Ejaz Rahim has confirmed to Business Recorder that he is under probe by the Securities Exchange Commission (SEC) of USA for having linkage with a junior investment banker at Credit Suisse in New York.
However, he denied any wrong doing and said that he is fully co-operating in the investigation with the US federal authorities. Rahim, now living in Toronto, resigned from Faysal Bank in April, 2007, as his family had migrated to Canada last year.
He confirmed hiring accused Hafiz Mohammad Zubair Naseem during his stint with the American Express Banking Corporation in 1996-97 in Lahore. And Naseem knew of the SEC probe while on a visit to Pakistan last month. He (Naseem) knowingly went back to the US obviously wishing to clear his name as he was not involved in any of the deals in the energy sector undertaken by Rahim.
Rahim said he was on friendly terms with Naseem and the information received from him was of generic nature. Further, he has provided SEC (US) with charts and technical analysis, undertaken on January 29th, by an analyst of oil and gas stocks in London. On the basis of this report he claimed to have executed a leveraged 6700 call option deal three days before any announcement of acquisition of TXU by an investor group led by Kohlberg Kravis Roberts.
Rahim confirmed making $5 million in the single trade. He said between February and March he made six or seven deals of some illiquid stocks based on the London analyst''s report and made earned profit on half of them, losing on the other half.
Rahim described the SEC (US) charge of a printer being near Naseem''s desk as frivolous and said it was not in his knowledge. And, he has written confirmation from Naseem that his tips are based on generally available information and he had no direct connection with any deals.
Rahim also denied opening of any brokerage account by Naseem in Pakistan giving him the authority to operate it. He has not been to Pakistan since 2004, he added. He felt that Naseem''s going back to US having full knowledge, of the on-going investigation of the TXU deal is a proof of his innocence.
Rahim was saddened by the news published in the Pakistan media, based on US reports about the affair, without any independent investigation. He accepted the blockage of his brokerage account and was confident that the account would be released once the SEC (US) probe is completed. Zubair Naseem hails from Lahore. Son of a former Railway officer, he is a position holder from LUMS and is reported to be planning to return home after the treatment of his sick child.
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