Experts compare notes on developing corporate sector at SECP Forum

At the first meeting of the SECP Financial Markets and Corporate Sector Development Forum on Thursday in Karachi key market experts, industrialists and policymakers shared their ideas on developing fair, transparent and efficient financial markets and a vibrant corporate sector.

The forum was a gathering a select group of best minds in the market. It was aimed at seeking guidance from the rich and diversified experience of key stakeholders from various sectors and professions, including Mr Shoukat Tareen, Mr Hussain Dawood, Mr Iqbal Ali Lakhani, Dr Ishrat Hussain, Mr Zakir Mahmood, Mr Shahid Ghaffar, Mr Mahmood Mandiviwala, Mr Shabbar Zaidi, and Mr. Omer Moershed.

While opening the session, Mr Mohammad Ali, the SECP Chairman, remarked that the SECP recognizes the need for developing vibrant markets, sectors and market players as well as for improving their capabilities and processes. That’s why it has engaged the external stakeholders in a consultative process both at policy level of the SECP Forum and working level of sector-specific committees. The ideas and suggestions shared at the forum will steer the SECP to be an effective regulator of the markets and contribute to the capital formation leading to the growth of the economy, he said. He stated that the guidance taken from the policy level of the SECP Forum will be implemented at the working level and would reflect in the SECP’s actions in the near future.

The forum discussed various issues that hampered the growth and development of the markets and corporate sector in the country and have resulted in fragmentation in the markets. The issues identified range from the access to capital for the SME sector and the outreach expansion of non-bank financial sector to the SME and rural areas of the country, development of second tier of financial institution after the banking sector, enhancing the investor base in the capital markets, implementation of an effective legal framework covering corporate rehabilitation, de-mutualization of stock exchanges and future trading etc. The participants also highlighted the immediate need for implementing Corporate Rehabilitation Act and De-Mutualization Act and urged the SECP to push forward the process in this regard.

The need to work on corporate governance and restructuring of SOEs, implementation of the national warehousing project to improve functioning of commodities exchanges and the need to clearly define DFIs role for infrastructure and industrial development of the country was also emphasized by the participants. Mr Tahir Mahmood, Commissioner, SECP, apprised participants of the improvements in the legal framework of the takeover and the corporate law that are under consideration at the Corporate Law Review Commission that has been reactivated by the SECP.

The forum in Karachi was the first event as part of the SECP’s monthly programme which will alternate between Karachi, Lahore and Islamabad inviting stakeholders from industry, regulators, academia, media, sector associations, multilateral agencies, market participants, and other important players. The second meeting of the forum will take place in Lahore

SECP tells holding companies to enhance public disclosure

ISLAMABAD: Group Companies Registration Regulations, 2008, were issued by the Securities and Exchange Commission of Pakistan in 2008 to provide a regulatory framework for the formation of group companies, comprising a holding company and its subsidiaries and to streamline the group ownership structures.

The Regulations provided a registration mechanism of holding companies along with their subsidiaries as a group with the SECP, and also provided an enabling framework for the group companies intending to avail themselves of tax relief from the FBR.

In order to further enhance the public disclosure of intra-group shareholding and financial position of the group companies, it has now been required that all the holding companies registered under the Regulations shall maintain their websites and place thereon the annual audited financial statements of their group along with their directors’ report and the auditors’ report. SRO No. 640(I)/2011 was issued on June 22, 2011, mandating the aforesaid requirement, and the holding companies have been required to report the compliance by intimating the SECP of their website address within 15 days of the issuance of the notification.

Arshad Ali to head FPCCI’s committee on Labour Manpower Export and Overseas Pakistanis

Syed Arshad Ali, a prominent name in the hospitality industry and a former chairman of the Pakistan Hotel Association, has been appointed as the Chairman of the FPCCI’s Standing Committee on Labour Manpower Export and Overseas Pakistanis.

Arshad Ali, Managing Director, Integrated Facilitators (Pvt) Ltd, has been assigned the responsibility by Senator Haji Ghulam Ali, President, Federation of Pakistan Chamber of Commerce & Industry (FPCCI), for the year 2011.

SECP proposes changes in NBFC Regulations, 2008

The Securities and Exchange Commission of Pakistan (SECP), vide S.R.O. 350 (I)/2011 dated May 5, 2011, has proposed certain amendments to the NBFC & Notified Entities Regulations, 2008 (the “Regulations”) and have also placed these amendments on its website to solicit comments from the public and concerned quarters.

While allowing operational flexibility to fund managers, measures have also been introduced to ensure investor protection. It is a step forward by the regulator for a more conducive regulatory framework to help the industry participants to benefit from growth opportunities.

The significant amendments encompass:

1. Replacement of seed capital requirements with minimum fund size to offer flexibility to fund managers in launching new mutual funds;

2. Restricting annual equity brokerage paid by a mutual fund to a single broker to 10% of its total brokerage expense, for promoting competitive brokerage services. Besides minimizing concentration risk posed to mutual funds, such measures are also aimed at encouraging other financial market participants to benefit from the diversified brokerage services rather than routing bulk transactions through single or a few brokers.

3. Empowerment of unit holders for decisions on material aspects of a mutual fund including transfer of its management rights;

4. Enhancement of role of trustees of mutual funds to ensure better safeguarding of unit holder interests and prohibiting them from investing in mutual funds for which they act as trustee.

5. Imposition of 5% cap on investment by a single unit holder in a mutual fund with the objective to contribute towards broadening the investor base.

6. Removal of minimum lease period for any lease to provide operational flexibility to leasing companies;

The SECP, as part of its continuous efforts for development of the capital markets has proposed the amendments in accordance with the best international practices and are aimed at encouraging the growth of mutual funds.

Any suggestions or comments on the proposed amendments may be submitted by May 21, 2011 at NBFC.Comments@secp.gov.pk

Press Statement: Karachi Chamber of Commerce and Industry

SECP nominate Aftab Ahmad Khan, Mumtaz Hussain Syed, Asif Kamal and Bushra Naz Malik as LSE directors

The Securities and Exchange Commission of Pakistan (SECP) has nominated high profile and experienced professionals from the financial and capital markets as directors on the Board of Lahore Stock Exchange (LSE) for 2011.

They are Mr. Aftab Ahmad Khan, Group Director (Finance & Accounts), Nishat Group; Mr. Mumtaz Hussain Syed, Chief Executive, Crosby Capital Pakistan (Private) Limited; Mr. Asif Kamal, Chairman, Trust Investment Bank Limited; and Ms. Bushra Naz Malik, former Group Director, Finance and Chief Financial Officer, Kohinoor Maple Leaf Group.

They come from the fields of project finance, accounts and investment banking have valuable capital market and corporate sector experience and can be seen as a fair mix of the requisite qualification and skills on the LSE Board.

Mr.. Aftab Ahmad Khan, Fellow Member of the Institute of Chartered Accountants of Pakistan, has over 40 years of diverse professional experience. Presently, he is the Group Director (Finance & Accounts) of the Nishat Group, in which capacity he looks after financial and strategic planning and investment appraisal for the Group. Additionally, he is serving as Director on the Boards of the MCB Bank Limited and various other companies in the textile, paper, energy and hotel/ tourism sectors. He also served in the public sector organizations including Punjab Industrial Development Board dealing with Ghee, Sugar and Rice Milling and has been Director at the National Investment Trust Limited, Karachi from 2008 to 2010.

Mr. Mumtaz Hussain Syed, an investment banker by profession, has more than 22 years of extensive experience in the fields of project finance, investment management and analysis, business development and general management and has several high profile transactions in energy, telecommunications, banking, financial services industry and other sectors to his credit. Presently, he is the Chief Executive of the Crosby Capital Pakistan (Private) Limited which is providing financial advisory, business restructuring and management consulting services to various clients. Holding an MBA degree from the Lahore University of Management Sciences, he possesses extensive capital market experience covering privatizations, acquisitions, divestitures, debt arrangement, equity placement and joint ventures. He has also served on the Board of Directors of a number of listed companies as well as advisory positions with the government of Pakistan.

Mr. Asif Kamal, a graduate in Finance from the Business School of the University of South Florida, is presently the Chairman of Trust Investment Bank Limited: one of the leading investment banks in Pakistan. He is also the Chief Executive of Tricon Developers Limited, a real estate development company. He has also served as the Chief Executive of Genesis Securities Private Limited from 1994 to 2006, which is a financial advisory company. His professional and capital market experience accumulating up to more than 16 years, Mr. Kamal is also a member of the Federal Board of Investment since 2008 and a member of the Board of the Privatization Commission since 2010.

Ms. Bushra Naz Malik, Fellow Member of the Institute of Chartered Accountants of Pakistan, has over 16 years of professional and financial market experience which includes her 12-year tenure as the Group Chief Financial Officer of the Nafees Group of Industries, Lahore and a 4-year term as the Group Director, Finance and Chief Financial Officer of the Kohinoor Maple Leaf Group. She did her MBA at Kellogg Business School in the US and the Schulich Business School, Canada. She also has an LLB degree from the Punjab College and Advanced Management Program certification from the Harvard Business School.

It is expected that the LSE Board of Directors, in particular, and the capital markets in general, will greatly benefit from the mix of extensive knowledge, experience and diverse expertise the above professionals will be offering, and that the said individuals will be contributing positively towards promoting principles of good governance and transparency.

Mufti Munib ur Rehman appoints as Memeber of Modarba religious board

ISLAMABAD, March 11: The federal government has appointed the renowned religious scholar Professor Mufti Munib ur Rehman as a member of the Religious Board for Modarabas (Islamic financial institutions) with immediate effect. The appointment has been made in pursuance of Section 9 of the 1980 Modaraba Companies and Modaraba (Floatation and Control) Ordinance.

This position fell vacant with Mr. Imran Ahsan Nyazee’s resignation. Mufti Munib ur Rehman will serve out the remaining term.

The board considers applications for floatation of modaraba in light of Shariah. It provides guidance, based on the teachings of Islam, to the Registrar (Modarabas) of the Securities and Exchange Commission of Pakistan.

Consensus needed to tackle economic challenges: Ebad

Dr Ishrat Ul Ebad Khan, Governor Sindh has said that political consensus amongst all parties a pre-requisite to face challenges faced by the country.

Addressing the Annual Dinner 2010 of Korangi Association of Trade and Industry (KATI), the Dr Ebad said that the country and nation is facing various challenges particularly law and order and declining economy and all the stakeholders should sit together as the government could not face the challenges alone and without the help of all parties and the people. He said that MQM has already rejected the recent increase in POL prices announced by government. He said that MQM had rejected the POL price increase in the past as it was a big burden on the general masses. Governor said that though condition of economy is not good but still some indicators such as building up foreign exchange reserves and increase in exports are showing that the situation is not that bad either. He said that industry in Karachi has been exempted from load-shedding and the gas shortage has also been resolved with the consultation of KESC and SSGC's managements and the stakeholders. He mentioned that KATI has become a distinctive trade and industrial body through its efforts for the betterment of trade and industry. While paying tributes to Patron In-chief KATI, S M Muneer and his team he advised other trade bodies to follow his footsteps.

S M Muneer while expressing his dismay over 10 per cent increase in POL prices, said that the economy is already reaching on the verge of collapse the government has once again increased the prices of petroleum which would be extremely detrimental to the national economy and the break the backbone of general masses. He said that due to anti-people decisions would result in unrest among the people. He pointed out that one day strike in Pakistan causes Rs5 billion revenue loss to the national exchequer and government should also realize this factor and instead of increasing POL and utilities prices should try to avoid greater losses in the shape of strikes, industry's shut down and export shipments' failures. He once again demanded of the government to hand over the management of loss making public organizations such as PIA, Railways, Pakistan Steel, PEPCO, etc. to the some honest and professional stakeholders in private sector in order to bring them out of red and save Rs500 billion subsidies given to these organizations annually. The Chairman, KATI, Syed Johar Ali Qandhari in his welcome address pointed out the grim situation of the economy and asked the governor to give priority to the ongoing crisis of utilities shortage such as power load-shedding, water and gas shortage in the country's industrial and commercial hub - Karachi."Government should have to address the economy on first priority as the industries are closing down, exports declining, raw materials are getting expensive frequently and the Pak rupee has been devalued by 40 per cent in the last three years", Qandhari said.

The outgoing Chairman, KATI, Razzak Hashim Paracha said that Pakistan's industry is in really bad shape and the government should have act positively to save the industrial base to avoid mass scale unemployment in the country.

Former Chairman, Mian Zahid Husain pointed out that Karachi's industry has been exempted from load-shedding only due to the efforts by the Governor Sindh. Senior Minister, Sindh, Agha Siraj Durrani, Provincial Minister for Industries, Rauf Siddiqi, Vice President, FPCCI, Khalid Tawab and Senator Abdul Haseeb Khan also spoke on the occasion.

After discussion among coalition partners: Petroleum prices increase reduced by 50 percent

The government has agreed to reduce by 50 percent the recent increase in the petroleum prices in the country.An announcement to this effect was made by Federal Finance Minister, Dr. Abdul Hafeez Shaikh, while briefing media at the Governor House here late Thursday night.He said "after discussion among coalition partners which was held in a very cordial atmosphere, we have decided that the increase in the petroleum prices which was about 10 percent, be reduced by half, that is, five percent".Hafeez Shaikh said that because of this the government would have to bear an additional burden.

He said that in case of any reduction in the petroleum prices in the international market, the benefit of the same would also be transferred to the public.

Finance Minister said that there would also be 25 percent reduction in the allocation of petrol for government officials.Hafeez Shaikh said that a decision has been taken in principle to reduce the recent increase in the petroleum prices by 50 percent.

He said that a formal approval would be sought from the Prime minister and a notification would subsequently be issued.

Sindh Governor, Dr. Ishrat Ul Ebad Khan, said that after the increase in petroleum prices in the wake of enhancement in the price of the commodity at international level, the chief of the Muttahida Qaumi Movement (MQM), Altaf Hussain, talked to President Asif Ali Zardari, and it was considered as to how the impact of the enhancement could be minimised for the masses.

He said that President Zardari sent Finance Minister, Dr. Hafeez Shaikh, and Interior Minister, Rehman Malik, for talks with the MQM team, on how the impact of increase in petroleum prices could be minimised to provide relief to the masses.

Dr. Hafeez Shaikh said that in the past three months there was almost 26 percent increase in petroleum prices at the international level but the Government of Pakistan decided to enhance only 10 percent and had to absorb an impact of Rs five billion per month.

He stated that MQM Chief Altaf Hussain and President Asif Ali Zardari initiated a contact to try and further minimise the impact of increase of petroleum prices on the people.

Federal Finance Minister said “we decided to reduce this increase by 50 percent, that is, from 10 percent to five percent.

MQM leader Dr. Farooq Sattar, who was also present on the occasion, congratulated the people on the announcement regarding reduction in petroleum prices.

He thanked President Asif Ali Zardari, Prime Minister Syed Yousuf Raza Gilani, Finance Minister Dr. Hafeez Shaikh, and the MQM chief Altaf Hussain.

Dr. Farooq Sattar was of the view that attention be paid towards broadening the tax base.

Interior Minister, Rehman Malik, thanked the MQM leadership and Finance Minister, Dr. Abdul Hafeez Shaikh.

He said that Pakistan Peoples Party (PPP) and MQM always think for the betterment of the people and poverty alleviation.

Rehman malik also appealed to the transporters that in view of reduction in petroleum prices they should withdraw their strike call immediately.

MQM leaders Babar Ghauri, Syed Sardar Ahmed and Abbas Haider Rizvi were also present on the occasion.

SECP registered 323 companies in January

The Securities and Exchange Commission of Pakistan (SECP) registered 323 companies in January.

The highest share in new incorporations was of private companies totaling 290. Other companies include 20 single-member companies, 2 public unlisted companies, 6 non-profit associations, 4 foreign companies and one trade organization.

Of 323 companies, the highest incorporation of 53 companies each was witnessed in the services and trading sector, followed by 18 in Hajj and Umrah services, 17 in I.T., 16 in construction, 12 each in textile and communications, 11 in engineering, 10 in pharmaceuticals, 9 each in chemical, education, transport, and food and beverages, 8 each in power generation and fuel and energy, and 7 each in auto and allied, and corporate agricultural farming.

During January the Company Registration Office (CRO), Lahore, registered highest new incorporation of 108 companies followed by the CRO in Islamabad and Karachi registering 93 and 75 companies, respectively. The CROs of Peshawar, Multan and Faisalabad registered 17, 14 and 12 companies each while CROs in Quetta and Sukkur registered 3 and 1 company respectively.

The authorized capital and paid-up capital of 323 companies, is Rs1,774 million and Rs 712.08 million respectively. During the month, 51 companies increased their authorized capital with the aggregate authorized capital increment of Rs8.46 billion and 74 companies raised their paid-up capital with the total paid-up capital increment amounting to Rs13.6 billion.

SECP holds seminar on corporatization and e-Services

The Securities and Exchange Commission of Pakistan (SECP) held a seminar on corporatization and e-Services project of the SECP in Karachi in collaboration with Management Association of Pakistan.

This seminar was organized as part of the SECP initiative to encourage corporatization and create awareness about the eServices project. After e-Services launch in September 2008, such seminars have already been held in various cities of the country including Karachi, Lahore, Islamabad, Faisalabad, Multan, Rawalpindi and Sialkot.

This seminar was attended by participants from various companies as well as corporate consultants.

Mr Ibtesam Moatisim Khan, Director, Management Information System, delivered a presentation on the “e-Services Project of SECP” and also provided solutions to the difficulties faced by the users of eServices. The significance of eServices as an easy and cost-effective mode of filing of documents with SECP and new developments in e-Services were shared.

Mr. Sidney Custodio Pereira, in charge, CRO Karachi, apprised the participants of “corporatization and the role of SECP”.

The participants greatly appreciated the questions and answers session. They complimented the SECP on successful implementation of e-Services.

Famous cricket commentator, Mr Chishty Mujahid, now the Executive Director, MAP, expressed his gratitude to the SECP saying that MAP would continue to arrange such informative and interactive sessions with the SECP.

Karachi Income Tax Bar rejects proposed Rule 81B Active Taxpayers List

Mr Ali Rahim
President Income Tax Bar Association
Karachi.

Income Tax Bar Association, Karachi rejected proposed insertion of Rule 81B relating to Active Taxpayers List as it will affect every tax payer in the country.

In a communication to Federal Board of Revenue, it said FBR SRO 09(I)/2011, on January 6, 2011, after discussion by its members was rejected as functions and powers delegated under it negated available provisions contained in Income Tax Ordinance,2001. FBR record and data is not updated properly, web portal of PRAL faces numerous technical problems and unwarranted use of this law will be disastrous having negative impact on business activities of existing taxpayers.

Bar says taxpayer once suspended will have to run from pillar to post and their request will only be accepted when gratification is used. SRO will be considered a great tool to discourage existing taxpayers as harassment, highhandedness cannot be ruled out while exercising powers available in proposed Rule.

The Department, FBR failed to achieve task of broadening tax base and requested to shelve this SRO for time being, in the interest of country which is facing economic and geo-political challenges in the region, said Bar President Ali A. Rahim.

SECP takes Eastern Capital Limited to court, warrants issued

ISLAMABAD – January 12: The Securities and Exchange Commission of Pakistan (SECP) has filed a criminal complaint in a court against Eastern Capital Limited, ex-member of the Karachi Stock Exchange (KSE) and all those, including its director, involved in non-transfer of shares/funds and unauthorized pledges of client’s shares and other prohibited activities under Section 24(2) of the Central Depositories Act 1997 as well as offences under relevant provisions of the Pakistan Penal Code (PPC). The warrants for all the accused have been issued.

The SECP received numerous complaints/claims against five KSE brokers mainly pertaining to the alleged non-transfer of shares and non-payment of funds. The SECP directed the brokers to expedite resolution of complaints/claims and issued instructions for the immediate transfer of shares/funds to the claimants. The brokers failed to remedy the situation, obliging the SECP to suspend registration of Eastern Capital Limited and four other brokers.

Moreover, the SECP initiated enquiries against five brokers and appointed enquiry committees comprising officers from the SECP, KSE and CDC.

It emerged that the shares of the clients which were in control of Eastern Capital Limited for trading purposes only were moved, pledged and transferred to other accounts, without any authorization. . The shares were pledged with banks to obtain financing which were mostly used to liquidate liabilities of the brokerage house resulting in total loss to the investors.

Consequently, the SECP filed a criminal complaint in the court of Session Judge Karachi South against the Eastern Capital Limited and others. This is the third criminal complaint against the brokerage houses involved in illegal pledging of shares. The earlier two criminal complaints were filed against Capital One Equities Limited and Cliktrade Limited.

The SECP has also moved a reference under Section 18(b)(i) of the NAB Ordinance, 1999 with a request to investigate the affairs of Capital One Equities Limited and Cliktrade Limited to punish the culprits who have cheated innocent investors and to recover the investors’ savings which have been misappropriated/transferred for the personal benefits of the sponsors, directors and their associated concerns.

In addition, the SECP took steps to curb such market abuse by improving regulatory framework to facilitate the market participants. In this connection the SECP has recently approved a project of “Automation of Securities Settlement” which has jointly been implemented by NCCPL and CDC to facilitate the market participants to automate the mechanism for settlement of book-entry securities by eliminating the need for any manual intervention. The new system not only improves efficiency but also help in preventing mishandling of book entry securities of clients.

The copies of enquiry report on Eastern Capital Limited and criminal complaint are available on the SECP website. The SECP has also finalized the enquiry reports on the other two expelled KSE members and legal action is being taken against all those who were involved in prohibited practices.

Iftikhar Malik, Tariq Saeed and Jamil Magon visit Guard Auto Zone

SECP puts fraudulent company BIZNAS. Com out of business

Islamabad: The Securities and Exchange Commission of Pakistan has put an end to fraudulent activities of M/s. BizNas.Com Pakistan (Private) Limited.

A timely action by the SECP’s Karachi-based Companies Registration Office (CRO) has put an end to the fraudulent company, saving a large number of prospective investors losing their hard-earned money.

The Sindh High Court has passed an order for compulsory winding up of the company under section 305 of the 1984 Companies Ordinance. The official assignee has been appointed as official liquidator of the company.

The company was registered with the CRO on March 5, 2002. The main objectives of the company were designing and developing computers software packages. The company operated a website, owned by its parent company, through which it provided different IT courses and also made available to its members space for hosting on its website. The business mechanism of the company was based on a Pyramid or Ponzi scheme, in which returns are paid to earlier investors/members, entirely out of the money paid into the scheme by new investors/members.

The company’s activities were objectionable because they were not provided in its Memorandum of Association. Hence the company was doing ultra vires business. Moreover, the company was engaged in activities that were considered to be of a fraudulent nature, offering people incentives only for getting deposits from other investors.

The show-cause notices were issued to the company but the company failed to clarify its position. The CRO initiated winding up proceedings against the company and a case was filed in the Sindh High Court in 2002, which has now ordered compulsory winding up of the company.

43 investor complaints were resolved during the month by SECP

ISLAMABAD, November 11: As part of its enforcement and regulatory function, the Enforcement Department of the Securities and Exchange Commission of Pakistan passed 34 orders, fining defaulting companies besides issuance of 37 show-cause notices in October, whereas proceedings against five companies were closed with warnings.

The department imposed an aggregate penalty of Rs9.399 million on listed and unlisted companies in October for non-compliance of various provisions of the 1984 Companies Ordinance. The department also resolved 43 investors’ complaints during the month.

Statement by an IMF Staff Mission on Pakistan

An International Monetary Fund (IMF) staff mission, led by Adnan Mazarei, met with the Pakistani authorities in Islamabad to continue discussions on the fifth review under Pakistan’s Stand-By Arrangement (SBA). Mr. Mazarei made the following statement at the conclusion of the mission today:

“Over the past few days, an IMF staff mission and the Pakistani authorities had constructive discussions which focused on assessing the impact of the floods on Pakistan’s economy, adjusting economic policies to respond effectively to the needs created by the floods, and on the outlook for the rest of the financial year 2010/11.1

“Progress has been made regarding the measures to be implemented in the context of the authorities’ economic stabilization and reform agenda, while protecting the poor. Specifically, we have reached broad agreement on the macroeconomic framework and a revised 2010/11 budget deficit target to help flood victims, and rein in inflation, which hurts the poor most. The authorities consider that the reformed general sales tax is essential to raise revenue to finance relief for flood victims, poverty reduction, and infrastructure reconstruction. Tax reform is also needed to make the tax system more equitable. The authorities recognize the critical importance of energy sector reform. They have initiated reforms aimed at reducing load shedding, which is severely hurting economic activity; curtailing energy subsidies in order to free up budget resources for spending in priority areas; and resolving the issue of circular debt.

“The IMF remains committed to the ongoing dialogue with the Pakistani authorities, and discussions will continue including around the Pakistan Development Forum to support Pakistan’s efforts to strengthen macroeconomic stability and growth and completing the fifth SBA review.”

FBR extends last date for filing of IT returns up to October 15

Federal Board of Revenue (FBR) has extended the last date for filing of Income Tax returns up to 15th October, 2010 in the wake of situation resulting from massive flash floods and other related matters.

The extension has been granted following representations from various business organizations and classes of taxpayers who had sought further extension in time for filing of returns. It has, therefore, been decided to extend the last date for filing of income tax returns/statements for the tax year 2010, in the case of Business Individuals, Salaried Individuals, for Annual Statement by the Employer and for the returns of income by Association of Persons (AOPs) to 15th October 2010, says a press release issued by the FBR.

SECP receives overwhelming response to amnesty schemes

The Securities and Exchange Commission of Pakistan (SECP) have received an overwhelming response to its amnesty scheme for regularization of belated returns and easy exit facility to dormant companies, which was launched on July 1, 2010 for three months.

Under the Company Regularization Scheme (CRS) some 250 companies have regularized their defaults and have filed 700 returns by July 27, 2010. Similarly, under the Companies Easy Exit Scheme (CEES) around 100 companies have applied to avail themselves of the exit facility.

The schemes have been launched for three months from July 1, 2010 to September 30, 2010 (in three phases of one month period each) with different fee schedule. The first phase of the schemes would be closed on July 31, 2010. However, the documents under Phase- I shall be accepted by Monday August 2, 2010 due to holiday on July 31, 2010. As such, only three days have been left in closing of the first phase.

The regularization scheme was applicable to all types of companies other than listed companies, and enabled acceptance of overdue returns and annual accounts by paying only normal filing fees plus one half of the normal filing fee as additional fee without any penalties, during the first month. However, in the second month of the scheme, the fee will increase and the late submission of documents will be accepted by paying of normal filing fees plus one time the normal filing fee as additional fee.

The SECP always facilitates the corporate sector in compliance of law through simplification of procedures. The schemes will increase compliance of law by registered companies and also help weed out the dormant ones.

SECP starts online survey on services provided by Company Registration Offices

Islamabad, July 9: Securities and Exchange Commission of Pakistan (SECP) has started an online survey on its website, entitled ‘Survey on Services provided by the Company Registration Offices’. The survey is available at http://sraposrc/secsurvey/index.php?sid=99227&lang=en

The survey is aimed at eliciting feedback and suggestions from companies, consultants and other stakeholders, on the services extended by the SECP at its eight regional offices called the Company Registration Offices (CROs). The CROs play a vital role as the front offices of the SECP having direct interface with the public. They are located in the provincial capitals and in industrial hubs of the country. They mainly function as corporate registry and are the custodian of corporate records.

Consisting of 25 simple multiple-choice questions, the survey takes only a few minutes to complete. It also includes specific questions on eServices, seeking inputs from the participants, with a view to making it more user-friendly.

The SECP encourages the users of services provided by the CROs, to share their opinions about the existing service delivery system and also to make their suggestions for future improvement. This will enable the SECP to further extend its facilitation and to provide more efficient services to the utmost satisfaction of the stakeholders.

Pak Suzuki enhances car prices from today

The Pak Suzuki Motor Company (PSMC) on Saturday again increased the prices of its various models by Rs 10,000 to Rs 15,000. This is the second time within two months that the popular PSMC has increased its prices, which are applicable from March 29, 2010. Previously, the company had raised its prices by Rs 10,000 to Rs 15,000 on January 26. According to auto analyst it is expected that in the near future prices will further rise. Shafiq Shaikh spokesperson PSMC said that under unavoidable circumstances the company has to pass on a minor production cost to the consumers owing to increase in prices of international steel sheets and increases in wages and utility prices.
He added that still the company is bearing most of the cost pressure despite the depreciating rupee and other inflationary conditions affecting the economy that have pushed up the CKD and the local vendor parts costs. The price tag on all Suzuki Mehran models have been raised by Rs 10,000. Now Mehran VX, VXR, VX CNG, VXR CNG are tagged Rs 4,29,000, Rs 480,000, Rs 474,000 and Rs 524,000 respectively.

Pakistan on path of economic recovery: IMF

Pakistan’s economic growth has started to recover despite security and energy challenges and the country met almost all targets under the International Monetary Fund program, the global financial institution said on Tuesday.

“Pakistan’s program is progressing well,” the Fund said in a statement following ‘constructive discussions’ with Pakistani officials focusing on Pakistan’s recent economic performance, the outlook for the rest of the fiscal year.

Adnan Mazarei, who met with the Pakistani officials in Dubai over the past week to initiate discussions on the fourth review under Pakistan’s Stand-By Arrangement (SBA), noted that Islamabad observed all quantitative performance criteria, except for the budget deficit target, which exceeded by a small margin.

Listing positive trends Pakistan registered in recent months, the Fund said the exchange rate has remained stable at Rs 84–85 per US dollar, and the international reserves position has strengthened (the banking system’s gross foreign exchange reserves, including the State Bank and commercial banks, reached $14.3 billion in mid-February, of this total, the State Bank held $10.5 billion).

The early signs of recovery in some sectors and the improved external position are encouraging, although there are risks and challenges to Pakistan’s economic program.

“Economic growth in Pakistan is starting to recover; large-scale manufacturing output has started to increase, the improvement in the global economy has helped manufacturing exports, and private sector credit growth has picked up to some extent as businesses rebuild their working capital.

The IMF’s package for Pakistan - approved in November 2008- has been extended to $11.3 billion. Looking ahead, the IMF statement said, a resumption of higher growth is needed to raise living standards and will require improvements in the business climate to stimulate higher investment by local and foreign investors.

Emphasizing the need for stepped up donors support for the key anti-terror partner of the international community, the Fund said, early disbursement of donor financing remains crucial to support Pakistan’s stabilisation and reform efforts as well as laying the basis for a sustainable growth.

The IMF mission staff will prepare a report on the fourth review under Pakistan’s SBA, which is scheduled for consideration by the IMF Executive Board in late March.

Annual General Meeting of Pak German Business Forum

The annual general meeting of the Pakistan German Business Forum (PGBF) was held with the agenda of holding the election for a new Board. An announcement here said that the outgoing President, Salahud Din Ahmed, presented the annual report and welcomed the old and new members.

It said that the elections conducted under the supervision of Syed Khurshid Pervez in a very peaceful atmosphere.

The new board consists of Saifuddin Zumkawala of M/s. Allanz EFU insurance, Qazi Sajid Ali of BASF, Masud Akhtar of KSB Pumps, Abdul Baqay Khan of Merck Pakistan, Syed Nadeem Ali Kazmi of Siemens Pakistan, Razzak H.M. Bengali of Baluchistan Wheels Limited, Dr. Islam Hamid of Delta Pharma, Wasim Mirza of Pakistan Specialty Chemicals, Noordin Karim of Shermah Enterprises, Salahud Din Ahmed of Universal Business Equipment, Mian Abrar Ahmed of Cuckoo Industries and Khawaja Jahanzeb of Zeb Travels.

After the election proceedings, the newly elected Board members unanimously elected Saifuddin Zumkawala and Razak Bangali, as President and Vice President respectively.

Saifuddin Zumkawala thanked all the members for their confidence reposed in him and stated that he will try his level best to promote the affairs and aims/objectives more vividly of PGBF amongst in the country and internationally as well.

Federal Board of Revenue identifies 0.5 Million tax evaders

The task force of the Federal Board of Revenue (FBR) on broadening the tax base has identified 0.5 million rich people, who are not ready to come into the tax net. Sources stated that FBR and National and Database Registration Authority (Nadra) are jointly working on actual number of rich people earning huge income, but still out of the tax net. In this regard, the FBR and Nadra officials have convened meetings in recent past to identify such non-filers of income tax returns in all posh areas of Karachi, Lahore, Islamabad and other cities.

Based on risk-profiling of the taxpayers, the Nadra informed the FBR that approximately 0.5 million potential individuals, belonging to elite class, have not obtained the National Tax Numbers (NTNs). The risk-based profiling of un-registered rich individuals has been jointly done by the FBR and the Nadra. The FBR updated database has shown that out of 2.5 million NTN holders there are more than 1.8 million who are not filing income tax returns. Only 0.7 million are actually filing their due income tax returns. The FBR’s task force on broadening the tax base has decided that initially 150,000 (about 5 percent of the 1.8 million including abovementioned 0.5 million) individuals may be sent letters to file returns or explain why they did not file tax returns. These non-filers would be picked randomly through the computerised system to avoid discrimination.

The selection process would be done under the relevant provisions of the Income Tax Ordinance 2001 with the help of data particularly addresses provided by the Nadra. To ensure credibility of FBR, these letters may be prepared by one person and checked by another FBR official before such intimations are issued to the non-filers. This verification process would ensure transparency during the whole exercise. Taking another major initiative, FBR’s task force has also decided that thorough scrutiny of 150 most potential people would be done at the FBR level. The detailed data analysis of their profiles would be done to check their business trends using third party data. Senior officials of the FBR would be involved during this exercise to ensure that those potential taxpayers are selected, who have a high likelihood of being tax evaders. The analysis of 150 big tax evaders would also help to identify similar nature of cases within the same sectors.

Central Bank keeps discount rate unchanged @ 12.5 percent

The State Bank of Pakistan has decided to keep the policy rate unchanged at 12.5 percent. This was announced by the Governor, State Bank of Pakistan, Syed Salim Raza while unveiling the Monetary Policy Statement at a press conference held at SBP, Karachi this afternoon.
Mr. Raza said that macroeconomic stability has proceeded apace, as evident in the considerable decline in average Consumer Price Index inflation – which is the primary objective of monetary policy. In the first half of the current 2009-10 fiscal year (FY10) inflation recorded at 10.3 percent, compared to 24.4 percent during H1-FY09, he said and added that this decline is visible across almost all the subgroups of CPI.
“The inflation outlook for full FY10, nevertheless, remains somewhat vulnerable to the effects of fiscal consolidation efforts and to incipient international commodity price pressures,” he said and added that the State Bank expects the average CPI inflation for FY10 to remain between 11 and 12 percent, still much lower than the 20.8 percent inflation of last year, but higher than the 10.3 percent recorded in the first half of FY10.
Talking about the real economy, Mr. Raza said that the agriculture sector has shown improvement and the wheat crop was good with higher prices stimulating demand for consumer goods, and the cotton crop higher than last year improving textile production and corresponding exports. Modest but consistent recovery in Large-scale Manufacturing (LSM) is also encouraging, he
said and added that the LSM grew by 0.7 percent in November 2009 compared to a low of negative 20 percent in March 2009. “Revival in private sector credit and better-than-expected global recovery should further support economic growth,” he added.
Assuming that the current trend in LSM growth continues, the Governor said and added that the overall real Gross Domestic Product growth is expected to be 3.0 – 3.5 percent in FY10, as compared to 2.0 percent in FY09.
Referring to external current account, Mr. Raza said that progress in the external sector is also encouraging. The external current account deficit has declined to $2 billion during H1-FY10 from $7.8 billion in H1-FY09. A small decline in exports was substantially offset by a higher decline in imports resulting in significant reduction in the trade deficit, he said and added that the sustained flow of workers’ remittances ($4.5 billion during H1-FY10) has further contributed to the reduction of the external current account deficit.
“External current account deficit is projected at 3.4 percent of GDP for FY10 - a significant improvement over last year’s deficit of 5.6 percent and earlier projections of close to 5 percent,” he emphasized.
SBP Governor said that as a result of significant contraction in the external current account deficit, the overall balance of payments has posted a surplus of
$1.4 billion during H1-FY10 compared to a deficit of $4.8 billion in H1-FY09. A
modest increase in foreign portfolio investment, additional SDR allocation, and
SBA flows from IMF, more than compensated for the decline in foeign direct investment, he added.
However, he said sustained improvement in the balance of payments would depend significantly on the timing and scale of projected foreign inflows, especially the official flows pledged in Tokyo by the Friends of Democratic Pakistan. “Assuming the revised financial inflows are realized, the SBP’s foreign
exchange reserves are projected to reach close to $15 billion by the end of FY10,”
On the fiscal front, Mr. Raza said that the Federal Government has continued efforts for rationalizing expenditures, by phasing out subsidies and by adjusting the administered energy prices. “It has also taken in hand the organizational and administrative measures to bolster tax administration and revenue collection,” he added.
Mr. Raza said the State Bank has managed system’s liquidity to both support smooth functioning of the market and to do this consistent with the monetary policy stance. As a consequence, volatility in the interbank overnight money market Repo Rate – the operational target of SBP – has come down substantially and market interest rates have gradually eased in line with reduction in the Policy Rate."
“Integrating projections for balance of payments, fiscal accounts, and credit growth and given their interrelationships with inflation and real GDP projections, the equilibrium M2 growth is forecasted to be around 14.5 percent for FY10,”

While summing up the overall macroeconomic scenario, Mr. Raza said that much has been gained with respect to macroeconomic stability front on a challenging economic and security environment. Difficult decisions have been taken and adjustments were made to address a host of structural constraints, he
said.
“However, work remains to be done to consolidate this stability and set the stage for sustainable recovery. At the short term, we would want to see a reversion of the current inflationary uptick, and a more certain outlook for system’s liquidity,” Mr. Raza asserted.

TURK ENVOY CALLS ON CITY NAZIM

Ambassador of Turkey called on City Nazim Syed Mustafa Kamal at his office on Thursday to discuss matter of mutual interest.

City Nazim Syed Mustafa Kamal on this occasion said that Pakistan has strong brotherly relations with Turkey. Local Government of Turk City Istanbul can provide valuable cooperation to City District Government Karachi in its Rapid Bus Transport System and training program for rescue workers. He said that Istanbul has one of the best rapid bus transport system while they have also excelled in the rescue works particularly in the earthquakes. He said that we also need cooperation in the solid waste management.

Nazim Karahi informed the ambassador Mr. Hizlan about the importance of Karachi in the region. He said that Karachi offers lucrative business opportunities to foreign investors. Turk business community can also earn heavy profits from doing business here. He said that the government has upgraded infrastructure in Karachi for promotion of investment activities. Turk investors will also be provided with best facilities and support.

Turk ambassador Mr. Hizlan said that Turkey will soon arrange for the training of rescue workers in Karachi for which a permanent office will be established in the city so that the training could be arranged on permanent basis. He also appreciated the performance of City Nazim Syed Mustafa Kamal for his role in the rapid development of Karachi.

Pay Orders will be distribute by President Asif Zardari: on 29th Jan: Siraj Kassam Teli

Siraj Kassam Teli, Chairman Businessmen Group has said that Insha Allah the initial disbursement of Pay Orders will be made by the President of Pakistan , Mr. Asif Ali Zardari on 29th of January 2010 exactly one month after the unfortunate incident and immediately after that this process will continue at Karachi Chamber for all the affected parties till the completion of handing over pay orders to those whose final assessment is below Rs. 1.5 million, said Siraj Teli and the process of making these pay orders has already started in the National Bank as they have received statements and cheques duly signed by the signatories accordingly which is 1437 affected parties and the amount is Rs. 730,227,212.

Karachi Chamber by the Grace of Almighty Allah and as per the commitment has completed the scrutiny and assessment of the losses/claims of the goods/stocks/cash etc. except property/ buildings of the victims of Ashura day of Boulton Market/Light House and vicinity whose claims are below Rs. 1.5 million said Siraj Teli, and the ongoing process of finalizing those, whose amounts are above 1.5 million will be made in a week and Insha Allah they will also get their pay orders as and when their cases are finalized by the Scrutiny Committee.

Karachi Chamber altogether received over 2600 claim forms and after verification it was found that there was a lot of duplication and some were even from the people who were not affected by this incident, therefore the number came down to 1559, this was informed by Siraj Teli, and after the scrutiny of these forms by the Committees of the Managing Committee and Businessmen Group of Karachi Chamber along with representatives of the respective markets, verifying their details under oath with each and every individual concerned decided these cases which was a very hectic and lengthy exercise and consumed over 12 hours on daily basis of 60 businessmen who volunteered and the total staff of Karachi Chamber which is over 100 from the day this incident happened.

Siraj Teli, Chairman Businessmen Group and former President KCCI appreciated the role of the government which started from the day one after the incident i.e. 29th December 2010 when the Governor, Dr. Ishrat-ul-Ebad and the Minister of Interior Mr. Rehman Malik along with Dr. Farooq Sattar and Mr. Raza Haroon visited Karachi Chamber on our request and committed to compensate the affected traders.

In this process of providing relief to the victims the role of the Chief Minister Syed Qaim Ali Shah has been tremendously supportive, said Siraj Teli, by making an Official Committee for the purpose led by Zubair Motiwala and with the majority of the members being from the private sector and Karachi Chamber, and would like to personally thank the President of Pakistan Mr. Asif Ali Zardari for providing immediate time for the meeting with us on 30th December and accepting our demand of immediate initial relief of Rs. 3 billion and also the Honourable Prime Minister of Pakistan Syed Yousuf Raza Gilani for announcing of first Rs.One billion as early as 30th of December in the Cabinet Meeting in Gwadar on our request communicated by Rehman Malik, Dr. Farooq Sattar and Babar Ghouri informed Siraj Teli.

The Karachi Chamber is thankful to Dr. Zulfiqar Mirza, Home Minister of Sindh for visiting personally and after inspection in detail endorsing with 100% satisfaction and trust on the Business & Industrial Community of Karachi, said Siraj Teli and appreciating the fact that such a kind of colossal losses and involvement of thousands of traders in the incident could only be handled by the Businessmen Group of Karachi Chamber. I would like to specially appreciate the support and trust of Federal Finance Minister Mr. Shaukat Tareen and for providing the funds, said Siraj Teli.

Siraj Kassam Teli appreciates and salutes his colleagues of the Businessmen Group and the staff of Karachi Chamber for the job well done and also the great people of the affected areas, who even after suffering critically have cooperated and came down to their genuine losses under oath and proving once again that the vast majority of the traders are God fearing people and allowing to make this process transparent. The involvement of such a huge number of people in the process made sure that the transparency is maintained for above board finalization of the cases.

In the end, Siraj Kassam Teli wants to ensure the affected people that the rest of the claims will be paid and we have already made separate committee for reconstruction of the buildings as they were on 27th of December and this process will start very soon.

28/12 VICTIMS TO GET RELIEF CHEQUES FROM THIS MONTH; SHOPKEEPERS WILL NOT BE VACATED FROM THEIR OLD PREMISES; KARACHI AFFECTED MARKETS RELIEF COMMITT

First Meeting of Government of Sindh’s constituted “Karachi Affected Markets Relief Committee” for the rehabilitation and relief of victims of 28-December, 2009 tragic incident, was held under the Chairmanship of Committee and Advisor to Chief Minsiter Sindh for Investment, Muhammad Zubair Motiwala on January 8, 2010, wherein Chairman Businessmen Group & former President-KCCI, Siraj Kassam Teli, District Coordination Officer- City District Government, Javed Hanif, Additional Secretary Finance – Govt of Sindh, Saeed Ahmed Awan, Special Secretary Finance – Govt of Sindh, Najmus Saqib, President-KCCI, Abdul Majid Haji Muhammad, former President-KCCI, A.Q. Khalil and President, All Pakistan Memon Federation, Ahmed Chinoy also participated.

The House condemned and expressed sorrow on the tragic incident and reiterated the intent that the rehabilitation and relief to the victims will be extended on emergency-basis and it would be ensured that payment of claims would start for disbursement from current month. For this purpose, all the victims were asked to submit their claims through the platform of Karachi Chamber of Commerce & Industry by January 20, 2010, afterwards no claim will be received for assessment/ evaluation and processing. It is pertinent to mention that claim forms for City District Government Karachi and other institutions will also be submitted at KCCI where all the data will be amassed and accumulated for scrutiny in the presence of empowered and authorized representatives of the affected markets.

Committee with consensus agreed with the modus operandi suggested by KCCI and decided that after initial assessment of all claims; payments for disbursement to victims will be commenced from current month for claims being scrutinized (analysed/ assessed, evaluated and processed) in all aspects. Committee asked all the victims to submit their claims with entire responsibility and honesty. If any affected shopkeeper, in hesitation, has submitted wrong claim, he will also be given opportunity to correct the already presented claim and resubmit by January 20, 2010. Committee with consensus agreed that all affected markets which are already collapsed and those shall be demolished as declared dangerous by Karachi Building Control Authority will be reconstructed and repaired by City District Government Karachi. Similarly, all shopkeepers, Office and Godown holders in the said buildings, will be provided with same covered area space and they will not be evacuated from the old premise under their use. In this regard, KCCI, representatives of authorized affected markets, construction experts will give recommendations. Subsequently, it is requested to all affectees to extend their complete cooperation to the Committee. The Committee appreciated the decision of City District Government, especially Nazim-Karachi, Syed Mustafa Kamal whereby they announced for repair of affected buildings by CDGK. Next meeting of the Committee will be held on January 22, 2010.

18PC INCREASE IN GAS TARIFFS ACROSS-THE-BOARD IS A DEATHBLOW: KCCI

“18 per cent increase in Gas Tariffs by OGRA is one-sided decision and a deathblow to industrial, commercial and CNG Sector”, expressed by President, Karachi Chamber of Commerce & Industry, Abdul Majid Haji Muhammad, in a press statement, while expressing his deep concern against the decision of OGRA for allowing Gas Companies to increase gas tariffs across-the-board by 18 percent.

Abdul Majid strongly condemned and criticized the apathetic and slapdash attitude of the concerned quarters. He lamented that in the prevailing conditions, further increase in gas tariffs will worsen the situation, owing to further increase in CNG prices and ultimately commuters will be penalized and cost of transportation will high-rise.

Abdul Majid recalled that during the hearing of SSGC in OGRA, KCCI, raised high-voice against the unjustified increase of tariffs allowed by OGRA to gas companies from time to time, while considering the case one-sided and not bearing in mind the point of views of other parties viz. industrial, commercial and domestic consumers.

Abdul Majid lamented that such actions will protect the vested interests of gas companies and their revenue generation will yield whereas the industry and commercial concerns are fatally stabbed with another deathblow which will increase the cost of production and doing business and will further narrow down their profitability.

Abdul Majid was of the view that such harsh decision without consultation and consent of stakeholder may result in widespread discontentment in the business community. The closure of industry, due to detrimental affect of high cost of production due to higher utility tariffs will lead to flight of capital, massive unemployment and decline in the revenue of government, he focused.

Abdul Majid maintained that the said increase will pose a killing threat for the industry owing to highest-ever tariffs of utilities in the history of Pakistan. The cost of production/ manufacturing has gone exorbitantly higher absolutely due to unjustified policies of OGRA and NEPRA.

Abdul Majid stated that it is incomprehensible that on one pretext, government contemplates to achieve the targets for nominal growth of 2.5 percent and on the other pretext its inconsiderate and austere decisions to increase utility tariffs have already penalized the industry and posed as terrible threats for achieving the same.

At present, country is going through a worst economic crisis in terms of escalating cost of production/ manufacturing based on continuous rise on the utilities. The dollar has depreciated in the international market, oil prices have stabilized, interest rates and inflation started decreasing. In wake of such indicators, it is unjustified to enhance the tariffs, he maintained.

Abdul Majid demanded that Government must negotiate with foreign companies for favourable conditions; and interests of the business community should at the forefront of OGRA decisions rather than that of foreign companies earning huge profits from Pakistan and sending foreign exchange to their respective countries.