ISLAMABAD: National Accountability Bureau (NAB) on Wednesday informed the Senate Panel that Chairman NAB accorded approval of inquiry through Joint Investigation Team (JIT) with Security Exchange Commission of Pakistan (SECP) in order to probe alleged manipulation of share price and inside trading in Bank of Punjab.
On investigation related to Multan Metro, the SECP submitted letter of China Securities Regulatory Commission (CSRC) before the Senate panel on which Senators asked the NAB investigators to ascertain its authenticity. However, the Senators did not raise any question till the moment the SECP’s Executive Director Khalida Habib remained present during the proceedings of the meeting. When she left the room the Senators decided to summon her in order to explain the letter which she submitted in English version stating that they received from Chinese CSRC where the Chinese regulators accepted whole blame of corruption on Yabaite firm.
The Senate Standing Committee on Finance held its meeting under Chairmanship of Senator Saleem Mandviwalla here at the Parliament House on Wednesday in which Director NAB Izhar Awan briefed the Senators by stating that Chairman NAB on February 21 accorded approval of inquiry through Joint Investigation Team (JIT) with SECP to probe manipulation in price share and inside trading in Bank of Punjab. The SECP will inquire inside trading matter and NAB will conduct inquiry on charges of misuse of authority under section 9 of National Accountability Ordinance (NAO) 1999.
Earlier, he said that the Chairman of Senate Standing Committee on Finance Saleem Mandviwalla had signed letter on January 5, 2018 which the NAB received on February 14 after passing 40 days but the Chairman NAB took prompt action and approved formation of JIT for conducting inquiry.
Chairman Senate Panel Saleem Mandviwalla said that they decided to refer different matters to NAB because the SECP was not cooperating with them so they were forced to send alleged corruption cases to NAB. On alleged Multan Metro scam, the Senators especially Saleem Mandviwalla and Senator Mohsin Aziz asked the NAB to hire independent firm to investigate this case because SECP was all out to defend might culprits. The SECP submitted letter of CSRC in its response vide email dated February 22, 2018 stating that recently the CSRC investigated and penalized Jiangsu Yabaite Technology Co Ltd. Through careful and through investigation the CSRC found out that by fabricating participation in Multan Metro Bus Project from 2015 to September 2016 Yabaite inflated its revenues by 580 million Yuan and profit by 260 million Yuan in total, and as much 73 percent of its disclosed annual profit for 2015, 20 percent of its disclosed profit for the first three quarters of 2016. “The above fraudulent financial statements were disclosed in Yabaite’s 2015 annual report, the 2016 semiannual report and third quarterly report of 2016, constituting disclosures violation of the Security Laws.
The letter further states that Yabaite disclosure on violation case is in its nature a serious cross border financial fraud orchestrated by a listed company investigated and processed by CSRC. Given that overseas projects were involved in the case, the CSRC initiated the cross border enforcement cooperation procedure under the IOSCO MMOU framework in a timely manner to request regulatory assistance from authorities of overseas jurisdictions including Pakistan, Hong Kong and the United States etc. The information provided by the overseas regulators fitted with evidence collected by CSRC in mainland China thus establishing a complete evidence chain that led to major investigation breakthrough and allowed the CSRC to identify and verify Yabaite’s malfeasance in this case. Up to date, the CSRC has signed bilateral MOU with regulators more than 60 countries and regions and consistently strengthened cross border regulatory cooperation and exchange of information.
Yabaite case, the letter of CSRC states, surfaced the new trend in cross border financial fraud conducted by listed companies.
Upon request of parties, a hearing session was held after the administrative penalty decision was informed where the CSRC cross examined relevant evidence in accordance with the law. Based on factual evidence of parties’ fabricated participation in the Multan Metro Bus Project that CSRC had ascertained, the parties’ defending opinion was not accepted nor was the evidence put forward by the parties concerned admitted.
It states that Yabaite’s misconducts described above involve significant sums and constitute severe violations. Based on evidence and relevant laws, CSRC has decided to impose a fine of 600,000 Yuan on Yabaite and a fine of 300,000 Yuan on Lu Yong the chief management person in charge, who is also permanently banned from the market. Other responsible individuals are also subject to administrative penalties and market bans of different degrees.
NAB reference against one Brokerage House: The DG NAB informed the committee a reference default against Brokerage House was pending before the Accountability Court where 541 affected faced loss of Rs409 million as their shares were pledged to get bank loans. The representatives of Pakistan Stock Exchange proposed out of court settlement for which they sought cooperation from the SECP. The Senate committee recommends all stakeholders to find out such a solution through which affected could get their defaulted amount.