Thursday, October 22, 2020

SECP, PSX Board accountable for appointing a foreigner as MD of the bourse

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Zubair Yaqoob
Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com He can be reached at: [email protected]

The Securities and Exchange Commission of Pakistan (SECP) and Board of Directors of Pakistan Stock Exchange (PSX) are equally responsible, hence accountable for appointing a foreigner ( Richard Morin) as the Managing Director of Pakistan Stock Exchange in violation of rules and regulations.

Canadian national Richard Morin does not meet the fit and proper criteria of the SECP, and his appointment as MD of country’s premier bourse poses serious conflict of interest and ultra vires of Articles of Association of PSX.

Richard Morin was selected by the Chinese shareholders of the bourse, and also enjoys support of some local profiteers.

There are several professionals in Pakistan who would have been better choice to head Pakistan Stock Exchange (PSX), instead of importing such a person who served Stock Exchange of Mauritius (SEM) almost twenty years ago as Managing Director.

Morin was hired in January 2018 after approval from Chinese investors. A consortium of Chinese exchanges acquired 40% shares after three exchanges were merged into one and listed.

Chinese took 40% shares of PSX and to protect their investment it was decided to keep top three slots including the position of Managing Director, Chief Financial officer and Chief Compliance Officer under their control.

Surprisingly, Ahmed Mitha CFO was not replaced as he might be useful to the representatives of Chinese investors in Pakistan.

Richard Morin was approved after meetings with Chinese investors in China and when he assumed the office of MD PSX, the bourse’s share was trading at Rs28.25, which is now trading at a discount of over 100%, this also needs to be investigated.

In real terms, new MD could not deliver what was expected from him. No new products, no new investors rather investors decreased significantly from approx. 250k to less than 200k.

In addition exorbitant expenses to maintain the ultra-modern life style of the imported MD and information leakages issues are still in place.

It is also learnt that local management, stockbrokers and Board members are losing hopes. Recently, three show cause notices were issued to MD on

(a) Conflict of Interest -As he is still Chairman and Chief Compliance Officer of Archer Wealth Management Inc. Canada (AWMIC).

(b) Failure to disclose his interests in AWMIC-as required to be under the Companies Act,2017;

(c) In violation of Fit & Proper criteria of Securities Exchanges as notified by Securities and Exchange Commission of Pakistan.

(d) Ultra vires of Articles of Association of PSX.

AWMIC website reflected the Canadian MD as its Chairman. Despite all the questions of law, Morin’s appointment as MD PSX  shows the strength of new Board of Directors of PSX and its management.

Earlier, senior brokers of Pakistan’s stock exchange has differed the appointment of Richard Morin, but their  hue and cry went unnoticed.

A senior broker, who witnessed the pitch and rise of the market since four decades said that a foreigner can’t change local market’s psychology.

The appointment of Richard Morin was made under the pressure of Chinese investors following the approval of the regulators.

” Local investors cannot stand with Richard Morin’s smile worth a million that would lead to loses in billions, our men has talent to serve better and lesser in perks than a foreigner, who enjoyed in millions other then side kicks, example of German national hired for PIA is fresh, one can quote” said senior broker

Read also: KSE-100 nosedives on panic selling

Zubair Yaqoob
Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com He can be reached at: [email protected]

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