The Section 15A of the Securities and Exchange Ordinance, 1969 was in question before the Supreme Court on Wednesday during the hearing of a plea seeking disqualification of PTI Chairman Imran Khan and Secretary General Jehangir Khan Tareen from Parliament.
Pakistan Muslim League-Nawaz (PML-N) leader Hanif Abbasi had filed a plea seeking disqualification of Pakistan Tehreek-e-Insaf Chairman Imran Khan and Secretary General Jehangir Khan Tareen over alleged non-disclosure of assets and existence of offshore companies, besides receiving foreign funding for the party.
Appearing before a three-member bench led by Chief Justice Mian Saqib Nisar in the matter on behalf of Tareen, Advocate Sikandar Bashir Mohmand termed an amendment in Section 15A and B of the Ordinance through the Finance Bill unconstitutional, saying the apex court has jurisdiction to declare such an amendment void by taking a suo motu notice.
While defending his client, Mohmand pleaded that occurrence of inside trading crime is subject to intent whereas the SECP never issued notice to Tareen for any inside trading crime.
It is worth mentioning here that earlier while submitting a concise statement in the matter relating to offence of insider trading in transaction of share purchase of United Sugar Mills (USM) by JDW Sugar Mills Limited, the Securities and Exchange Commission of Pakistan (SECP) apprised the court that Tareen being the director of JDW was authorized by the Board of Directors of JDW to negotiate the acquisition of USML.
The SECP had further told the court that Tareen was privy to all inside material information during acquisition of USML and consequently made a hefty gain in violation of Section 15A of the Securities and Exchange Ordinance, 1969 (Ordinance of 1969).
The body also told that unusual trading pattern and price movement in the shares of USML from November 2004 to November 2005 was observed by the SECP and investigation under Section 29 of the SECP Act, 1997 was ordered on December 12, 2006.
The SECP also apprised that investigation report revealed the contravention of Section 15A of the Ordinance of 1969, Section 214, 216, 217 & 222 of the Companies Ordinance, 1984 and Section 4 of the Takeover Ordinance. It was further revealed that Tareen acquired 341,780 shares through Haji Khan and Allahyar and made a gain of Rs 70.811 million through sale of his shareholding in USML, in the stock market and under the public offer made by JDW in October 2005.
During the course of proceedings, Chief Justice Mian Saqib Nisar observed that insider trading of a public company''s stock has nothing to do with intent of an individual, saying Tareen has not contradicted a fact that he was not in picture about the shares price.
Hinting at deciding disqualification case against Imran Khan and Tareen altogether, Chief Justice Mian Saqib Nisar remarked the court is examining facts of the case in hand profoundly.
Mohmand informed the bench that Tareen had resigned as the chief executive officer and was discharging his responsibilities as a member of the board of governors of the company whose shares were brought.
Responding to a question of Chief Justice Mian Saqib Nisar regarding Allahyar and Haji Khan'' current status, Mohmand said that Allahyar has been an employee of Tareen since 1975 who is currently overseeing Lodhran farm. He further said that Haji Khan has been working for Tareen since 1980 and is currently looking after the residencies of Tareen in Lahore and Islamabad.
However, Mohmand admitted that his client provided an amount to both the persons, saying Allahyar purchased shares for ASB company from January 12, 2005 to October 27, 2005 which were sold with a profit of Rs 33.145 million, adding that similarly, Haji Khan also purchased shares for ASB company from May 3, 2005 to Nov 19, 2005 which were sold against a profit of Rs 37.666 million approximately.
A member of the bench Justice Umar Atta Bandial questioned whether or not insider trading by Tareen was held in a fair manner. Raising objection over revised statement of Imran recently submitted before the apex court in the matter, the counsel for Abbasi, Akram Sheikh, termed Khan''s concise statement submission unprecedented. Mohmand will resume arguments in the matter today.