Daily Times

ISLAMABAD: Pakistan Tehreek-e-Insaf (PTI) leader Jahangir Tareen was fined Rs 73,067,000 for violating companies’ rules and ordinances, the Securities and Exchange Commission of Pakistan (SECP) told the Supreme Court on Tuesday.

The fine was imposed on offence of insider trading in transaction of share purchase of United Sugar Mills (USML) by JDW Sugar Mills Limited (JDW), the SECP said further.

For the commission of offence, Tareen violated Section 15A read with 15B (3) of Ordinance of 1969, Section 214 of Ordinance of 1984-Disclosure of interest by director, Sections 216 and 222 of the Ordinance of 1984 and Section 4 of the Takeover Ordinance-Disclosure of acquisition of more than ten percent voting shares of a company, it added.

The SECP probed the entire matter which culminated into return of entire illegal gain of Tareen and recovery of penalties for contravention of relevant provision of laws, the SECP, however, stated in its reply submitted before the court.

The reply is submitted on a petition filed by Pakistan Muslim League-Nawaz leader Hanif Abbasi seeking Tareen’s disqualification the National Assembly. A separate petition is also filed against PTI Chairman Imran Khan for the same.

A three-member bench, headed by Justice Saqib Nisar, will hear the petitions on Wednesday (today). Naeem Bukhari will appear on behalf of the PTI leaders.

The SECP, which is respondent in the petition against Tareen, in its 4-page reply stated that JDW acquired 75 percent capital of the USML i.e. 2.250 million through a share purchase agreement dated October 21, 2005, whereas remaining 21.6 percent were acquired in a public offer held at Rs 333.33 per share, the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 (Takeover Ordinance), between October 27-November 17, 2005.

The reply added that Tareen being the director of JDW was authorised by the board of directors to negotiate the acquisition of USML.

“Hence he was privy to all inside material information during acquisition of USML and consequently made a hefty gain of rupees 70.811 million in violation of Section 15A of the Securities and Exchange Ordinance, 1969,” the reply claimed.

Reply stated that the SECP observed unusual trading pattern and price movement in the shares of USML from November 2004 to November 2005 and initiated investigation under section 29 of SECP Act 1997.

“Investigation report revealed the contravention of Section 15A of the Ordinance 1969, Section 214, 216, 217 and 222 of the Companies Ordinance 1984 and Section 4 of Takeover Ordinance,” the reply stated adding that Tareen acquired 341.780 shares through Messrs Haji Khan and Allah Yar and made a gain of rupees 70.811 million through sale of his shareholding in USML, in stock market and under public offer made by JDW in October 2005.”

The SECP served a notice to Tareen to explain his position regarding allegation surfaced in respect of unlawful gain.

Tareen while responding to notice stated that purchase of shares of USML made on behalf of him without disclosure, might attract the provisions of law pertaining to insider trading apart from provisions pertaining to non-disclosure of being an interested director and candidly admitted that provisions of law were contravened in the said transaction.

“Therefore, Tareen volunteered to offer return of illegal gain of rupees 70.811 million, recoverable under Section 15-B (3) of the Ordinance of 1969 along with fine of rupees 1.256 million under Sections 214, 216 and 222 of the Ordinance 1984 and Section 4 of the Takeover Ordinance,” the reply stated.

The SECP also stated that it accepted the offer after legal consultation and recovered the amount from Tareen.