The repeated assertions of former Chairman Securities and Exchange Commission of Pakistan (SECP), Dr Tariq Hasan, on the availability of Karachi Stock Exchange (KSE) data including share trading, bids and offers on March-2005 with the SECP seemed to be confirmed.
It was reported that Market Control and Surveillance Department of the KSE had provided all data about share trading, bids and offers to the SECP. The report was neither denied by the SECP nor KSE gave any clarification.
Commenting on the reported "KSE Market Control and Surveillance Department viewpoint", senior SECP officials said, "KSE would be the most appropriate department to comment on the issue. Any such report has not been seen at the SECP level. There are billions of transactions involved in the stock market and it is not clear that specifically what report has been referred to.
There may be chances that document may be present somewhere at the SECP, but it is difficult to confirm it", officials added. According to KSE, Surveillance Department, the SECP has been continuously provided with the trading information on a regular basis.
The information being sent on a daily basis as well as on a periodical basis deals with the trading analysis of all the active scrips as well as active brokerage houses in all Ready, Futures and COT markets.
This information is received by the dedicated Market Surveillance Wing of SECP and after their analysis, the SECP officials closely liasiee with the staff of KSE Surveillance Wing to seek more information and or adopt future line of action.
When Business Recorder contacted former Securities and Exchange Commission of Pakistan (SECP) Chairman Dr Tariq Hasan to confirm the report on Thursday, he said that even if all the KSE data was not available with the SECP, the pertinent data was provided by the KSE to the SECP. This relevant data was enough to carryout investigation proving three allegations.
Despite limitations, the Task Force succeeded in identifying at least three major instances of market abuse: Insider trading, wash trades, and pumping and dumping of liquidity in the market.
Task Force had submitted its findings on the basis of this KSE data. During Task Force's investigation, Karachi Stock Exchange (KSE) data was dully submitted to the SECP for onward submission to the Task Force.
The Task Force has based its findings on the evidence available in the form of data. He said it is not clear that whether the same data was provided to the M/s Diligence for carrying out forensic investigation or not. However, former SECP chairman was not in service at the time of investigation being conducted by M/s Diligence.
"I am neither privy to what has happened at SECP since my forced departure on January 12 2006 nor do I have access to the relevant documents", Dr Tairq Hasan said. Even if data was not provided to M/s Diligence, it was the responsibility of forensic investigators to probe the bank accounts and other data of brokers and financial institutions and conduct a thorough investigation.
They have to go beyond the data for investigating the broker's transactions during the period of stock market crash. He said that primarily there are two questions involved in the entire issue. One, whether this data was provided to Ms/Diligence or not. Secondly, the forensic investigators have to go beyond the market data. There is difference between simple audit and forensic audit.
Secondly, I have repeatedly informed the National Assembly Standing Committee on Finance that the relevant data available for carrying out investigation and it is not clear that the same was provided to the investigators or not.
Forensic experts should not only rely on documents and information provided by the clients, but they have to investigate the matter on their own. In other way they have to trace out their transaction through banks accounts of the brokers and they have to undertake data mining and data analysis, he added.
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