The federal government is poised to decide on the future of the Securities and Exchange Commission of Pakistan’s (SECP) top leadership, whose potential reappointment is shadowed by a significant financial scandal and the continued secrecy surrounding a high-level government probe into their conduct.
According to an official report by SECP today, Chairman Akif Saeed, alongside Commissioners Abdul Rehman Warraich and Mujtaba Ahmad Lodhi, face the end of their three-year terms on December 13, sparking widespread apprehension within the business community over their possible reinstatement while serious allegations of financial misconduct remain officially unresolved.
The controversy was ignited by an Auditor General of Pakistan (AGP) report, which uncovered that the SECP’s Policy Board approved unauthorized and retroactively applied pay hikes for its senior officials without the legally required prior consent from the Finance Division.
This adjustment resulted in an irregular annual package of Rs41.53 million for Chairman Saeed and Rs35.8 million for each commissioner during the 2023-24 fiscal year. The audit further exposed the illegal disbursement of Rs110 million in entertainment allowances to commissioners and staff members.
Moreover, the AGP found the financial regulator in violation of the Public Finance Management Act, 2019, for failing to remit a surplus of nearly Rs14 billion, generated from licensing and capital market fees, to the Federal Consolidated Fund (FCF).
In response to the audit”s revelations, Finance Minister Muhammad Aurangzeb mandated an internal inquiry and ordered the immediate suspension of all perks and benefits for the Chairman and Commissioners pending the investigation”s outcome.
Prime Minister Shehbaz Sharif also intervened, establishing a special, high-powered committee, initially chaired by Rana Sanaullah, to scrutinize the legality of the salary increases. The panel was tasked with submitting its findings within a stringent two-week timeframe and recommending measures to fortify oversight of all regulatory bodies.
However, despite these directives and deadlines, the government has not disclosed the findings or recommendations of the special inquiry committee, creating a transparency vacuum that has become a major point of contention.
Stakeholders, including lawmakers, have voiced grave reservations, pointing to a “conflict of interest” in the existing SECP law that permits the board to determine its own remuneration. They advocate for this power to be returned to the federal government.
As the term-expiry date approaches, pressure is mounting on the government to release the inquiry”s results and ensure any decision on the leadership is based on merit to restore and safeguard the credibility of Pakistan”s primary financial market regulator.