SECP refutes allegations about China’s regulatory body


ISLAMABAD, Aug 30 (APP): The Securities and Exchange Commission of
Pakistan (SECP) Wednesday strongly refuted the allegations being made by
a section of media that the officials of the Commission were involved
in delaying tactics for halting the investigations of China Securities Regulatory Commission (CSRC).
The impression being created by media that CSRC is conducting
investigation in Multan Metro bus project is incorrect and contrary
to the facts, an SECP press release issued here said.
The SECP confirms that no team of CSRC ever visited Pakistan
for investigation or taking statements of certain individuals in
the matter of Multan Metro bus project.
The SECP believes that incorrect and wrong reporting in the
matters involving authorities of foreign country may undermine the
credibility of the national institution.
During December 2016, the CSRC approached the SECP for its
assistance limited to the provision of information and certain
documents, without sharing all the details of its investigations.
This is the standard modus operandi for assistance sought
under the International Organization of Securities Commissions
(IOSCO) cooperation protocol (MMOU).
Throughout the process, the SECP, its officers and its various
departments dealt with the matter with due care, responsiveness and
unequivocal objectivity to play its due role as a counterpart
supportive member of IOSCO.
As such, any impression being created that the CSRC is conducting
an investigation into Multan Metro bus project is incorrect and
contrary to the facts, as is the accusation that the SECP has somehow
withheld or delayed the process. The fact is that the CSRC
repeatedly has thanked the SECP for its support and timely help in this
Accordingly, the SECP confirms that the CSRC has sought assistance
from the SECP in the matter of its investigation against the Yabaite –
the Chinese company – for its disclosure violation of Chinese
securities laws.
Further, the SECP cannot initiate any investigation in
Pakistan unless the CSRC’s ongoing investigation has established
the violation, which links to companies or individuals in Pakistan.
The CSRC’s investigation in the matter is still a work in
process and as confirmed by the CSRC the administrative sanction
proceedings in the matter are not yet complete.
The SECP has already requested the CSRC to share its investigation
report. Once SECP receives the CSRC’s Investigation Report, the SECP
will be in a position to assess any possible violation of the laws
administered by it. The SECP has neither delayed any requisite action on
its part nor hindered the CSRC investigation process.
It needs to be highlighted that the CSRC has, on two separate
occasions, appreciated the assistance provided by the SECP in the
instant case.
In their most recent communication they have said that the “CSRC
high appreciates the SECP’s assistance along the way”, while in the
previous communication they stated that the “CSRC is immensely grateful
for the SECP’s help”.
The SECP further confirms that no team of CSRC ever visited
Pakistan for investigations or taking statements of certain
individuals in the matter of Multan Metro bus project. Accordingly,
any incorrect and wrong reporting in this matter involving
authorities of a foreign country may undermine the credibility of
the national institutions concerned.
As reported by the CSRC, the Yabaite China claims that it
worked as a sub-contractor of Capital Engineering and Construction
Co. Ltd awarded to Habib Rafiq (Pvt.) Limited, in Multan Metro Bus
Project. It is to be noted that the Capital Engineering and
Construction Co. Ltd is not a company incorporated/registered with
the SECP.
Furthermore, the SECP visited the address of the Capital
Engineering and Construction Co., as reported by CSRC in Pakistan
which revealed that no such office exist on the given address.
The CSRC requested the SECP’s assistance in obtaining contract,
agreement and tender documents and information pertaining to the
Multan Metro Bus Project.
The SECP after obtaining the CSRC’s authorization to share
certain segments of its request with the concerned
authorities/companies in Pakistan- a requirement under the MMoU,
initiated gathering the requisite information and documents from the
concerned authorities, i.e., Punjab provincial government for
provision of information from Multan Development Authority (“MDA”),
Pakistan Engineering Council (“PEC”), State Bank of Pakistan,
Federal Board of Revenue and Yabaite (Pakistan) Construction Group
Co (Pvt.) Limited (“Yabaite Pakistan”), the concerned contractors of
the Project namely; Habib Rafiq (Pvt.) Limited (“HRL”), Matracon
Pakistan (Pvt) Limited.
The SECP would like to confirm that all the above departments
extended their full support in this regard. All information received
from MDA, PEC, SBP, Yabaite Pakistan, HRL and Matracon were shared
with the CSRC pursuant to the Commission’s approvals.
Subsequently, the CSRC vide its mail in late July 2017 shared two
letters that acknowledge and appreciate the Yabaite China
contribution in the Multan Metro Bus Project, purportedly signed by
the Chief Minister Punjab, Senator Kalsoom Parveen, and Senator
Mushahid Hussain Sayed and dully attested by the official of
Ministry of Foreign Affairs.
The Yabaite China produced these letters before the CSRC as
evidence, in support of its alleged involvement in Multan metro bus
construction project. CSRC requested the SECP’s assistance in
contacting the mentioned persons, verifying their identities, and
asking them to answer certain questions.
After soliciting the approval from the Commission, letters
were sent out to the Chief Secretary Punjab, Senator Kalsoom
Parveen, Senator Mushahid Hussain and Secretary MOFA, seeking
response to the questions raised by the CSRC and to verify the
authenticity of the letters produced by the Yabaite China before the
The Chief Secretary Punjab responded to SECP’s letter and
communicated on behalf of the Chief Minister Punjab that he did not
sign the said letter and that his signature is fake/forged or
Response was also received from the offices of Senator
Mushahid Hussain Sayed and Senator Kalsoom Perveen, both of whom
denied signing of any such letter and advised that the letter is a
The responses on above-referred correspondence with the
office of Chief Minister Punjab, Senator Kalsoom Parveen and Senator
Mushahid Hussain Sayed were subsequently shared with the CSRC.
It is pertinent to note that till-date CSRC has not shared any
investigation report in the matter with the SECP. However, the SECP has
written to the CSRC to share its investigations so that involvement
of any Pakistan-based company and/or individual, in any wrongdoing
can be ascertained at our end.
The CSRC informed the SECP Wednesday (August 30) that “currently
thiscase is still ongoing and they may not share any information before
the final decision of Administration Sanction is reached and made
public, and considering the confidentiality and independent nature
of CSRC investigation process, they may not share investigation
report at any stage”.
Furthermore, they have confirmed that “during the
investigation period of this case, the CSRC enforcement staff have
never inquired, nor attempted to inquire local officials from
Pakistan, or any Pakistani citizens.
Even if they may want to obtain inquiry records from
Pakistani citizens in the future, they would request for this
procedure to be conducted by SECP, as assistance under the IOSCO
Finally, they have also confirmed that “based on CSRC’s
existing investigation findings, they do not have any evidence
showing that Yabaite has any business transactions with claimed
Pakistan entities or natural person”.
Based on the above confirmations received from the CSRC today,
and to ensure complete transparency and a thorough independent
investigation into the affair from a Pakistani standpoint, SECP has
today sent letters to FIA and Government of Punjab along with the
information / documents pertaining to SECP (which have already been
shared with Ministry of Finance) with the advice to investigate the
matter independently.
Furthermore, available information from CSRC will be shared
with FIA and Government of Punjab after getting permission from
CSRC. Moreover, additional information in the matter will be shared
with them as and when received from CSRC.