According to a press release issued by the Securities and Exchange Commission of Pakistan (SECP), the appointment of a Corporate Ombudsman is under way 'as a part of the administrative set-up of the SECP'.
It may be recalled here that a proposal to appoint a banking Ombudsman was mooted some time past and the State Bank of Pakistan had also concurred with certain initial rules for the guidance of the Ombudsman but a follow-up in this direction is yet to be seen.
The proposed measure was discussed by the SECP Chairman, Dr Tariq Hassan with the visiting Tax Ombudsman, Justice Saleem Akhtar who promised to extend his support and assistance to the SECP in this task.
It may however be emphasised here that the proposed office of Corporate Ombudsman must be made independent of the SECP's supervisory function so that the Ombudsman could make his own judgement by analysing the merits and demerits of each complaint.
There can be no two opinions that the history of the functioning of Ombudsman in Pakistan is marked with significant contributions to the cause of promoting good governance in the various government departments and public-sector institutions.
The Ombudsman's intervention and judgement in response to hundreds of complaints from the aggrieved parties against the rulings and decisions of a cross-section of government departments and public-sector organisations, have redressed wide-ranging grievances to the satisfaction of the complainants.
The newly set-up office of Tax Ombudsman has also proved to be exceedingly helpful to the aggrieved taxpayers who previously did not have any alternative forum to get the wrong decisions of income tax departments set aside.
In fact, the decisions of the Tax Ombudsman over the last two years have pushed forward the process of desired reforms in the taxation departments, and in a number of cases, the CBR has been obliged to comply with the decisions of Tax Ombudsman.
Thus, long-pending cases of huge tax refunds besides wrong tax demands from the income tax department to taxpayers, were appropriately resolved as per decisions of the Tax Ombudsman.
As for the proposed appointment of a Corporate Ombudsman, the need for such a functionary, holding the status equivalent to a high court judge, can hardly be overlooked.
The wide-ranging reforms carried out by the SECP over the last three years in the stock markets as also in the corporate sector underscore the need for a closer overseeing of the compliance status in respect of the various measures.
Although the stock exchanges are competent enough to address the deficiencies in the compliance by companies vis-à-vis the SECP reforms, an authentic verdict by an independent authority like the Corporate Ombudsman would appear to be necessary to ensure that the code of conduct is fully implemented and followed in letter and in spirit by the corporate sector.
A very important aspect which is expected to be taken care of by the Corporate Ombudsman would be the complaints from the shareholders in particular and investors in general against certain inappropriate discretionary decisions of the corporate sector and even against the stock exchange authorities.
It may be pointed out here that questions are asked by the shareholders on a number of matters at the annual general meetings. But answers to these questions are usually evasive and sketchy.
The Corporate Ombudsman would be the right forum for the investors/shareholders to send their complaints for satisfactory answers from erring companies.
Moreover, the questions like lack of full disclosures in the annual and half-yearly reports of listed companies, delays in despatch of dividend warrants to the shareholders, in transfer of shares, and in holding annual general meetings etc, may also be referred to the Corporate Ombudsman.
Matters relating to appointment of auditors and their role in the preparation of audited accounts, besides the conduct of the auditors in protecting the companies' irregularities may also be fit questions for the Corporate Ombudsman to examine and adjudicate.