ISLAMABAD: Finance Minister Ishaq Dar said on Sunday said the government would introduce a mechanism to regulate offshore companies after the upcoming budget to prevent crises like the one that was caused by the Panama leaks.
Addressing a function under the aegis of the Securities and Exchange Commission of Pakistan (SECP) in Islamabad, Dar however said that establishing offshore companies was not an illegal act. He said the SECP, Federal Board of Revenue (FBR) and the State Bank of Pakistan (SBP) should work on offshore companies. He said the government would take money back from those who had their loans written off. He said that a clause had been included in the terms of reference (ToRs) formed by the government for the judicial commission on the Panama leaks to retrieve the written off loans. He said the parliamentary committee, which would decide the ToRs for the judicial commission, would be notified in two days.
The finance minister said the incumbent government had increased the tax growth rate to 56 percent. He said the government brought the budget deficit down to 4.3 percent from 8.8 percent. He said that foreign exchange reserves of the country were all-time high and all economic indicators were positive. He said that this was the result of the prudent policies being pursued by the incumbent government.
Distributing cheques to deposit-holders of the now defunct Innovative Investment Bank Limited (IIBL) at the SECP head offices, Dar urged the political parties to sign a charter of economy for a sustainable development and economic growth in the country. He handed over cheques to people who deposited up to Rs10 million to the IIBL and the total amount stood at Rs 1.1 billion. This way, 92 individual depositors out of 109 (84%) and 26 charitable institutions/trusts out of 44 (59%) shall stand fully repaid. In addition, 17 individuals and 18 trusts and charitable institutions have been partially paid.
It is pertinent to mention here that the Lahore High Court ordered winding up the IIBL in May 2013 on a petition of the SECP. The SECP accused the IIBL administration of serious financial irregularities.
Khawaja Waheed Raza and Amar Sana were official liquidators of the IIBL appointed by the court. The liquidators, under the supervision of the SECP, have already paid approximately Rs75 million to individual depositors and trusts and charitable institutions. Dar praised the liquidators and the SECP team at the function and said the court decision and its successful implementation would boost investors’ confidence in the state institutions. He stated that those who had a good financial standing, but they got their loans written off must pay this money back to the nation. He said that institutions would have to be strengthened to rebuild investors’ confidence. He said the investors should have the confidence that state institutions would come to their rescue if they would be cheated in the market.
Dar said that joint efforts of stakeholders were making Pakistan an economically stable country. He said that no one could now stop Pakistan’s inclusion in the MSCI Emerging Market Index. He said he was hopeful that in the upcoming assessment of the MSCI Emerging Market Index Pakistan would be included in the emerging market index. He said that this development would boost Pakistan’s image, build investors’ confidence and increase foreign investment in the country. He said that it would be a milestone achievement and another feather in the SECP’s cap.
The finance minister said the SECP had achieved the position and integrity that he envisioned in 1999 at the time of its inception. However, he said, the regulatory body still had to go a long way to ensure complete transparency and build investors’ confidence in the Pakistani markets. He said that he had appointed a competent team at the SECP without considering their political affiliations and now his critics admitted that his selection of Zafar Hijazi as SECP chairman was correct. He said that most of the laws related to the market and the corporate sector had been revamped.
According to international institutions, he said, Pakistan would become world’s eighteenth largest economy by 2050. If the nation works hard, he said, Pakistan could achieve this target by 2030. Currently, Pakistan is 44th largest economy of the world.
SECP Chairman Zafar Hijazi told the audience that steps were being taken to protect small investors and depositors for stability of the markets. He said the SECP was working on the Companies Bill 2016. He said the SECP wanted to give suggestions to the government on the Panama leaks issue. He said that wrong things were being done in the country, but the government could not stop them due to political considerations.