Law: Securities and Exchange Commission of Pakistan Act, (XLII of 1997)

Section: 33

Law: Central Depositories Act, 1997

Section: 24

ORDER This Order shall dispose of Appeal No.11 of 2014 filed under section 33 of the Securities and Exchange Commission of Pakistan Commission Act, 1997 by the First National Equities Limited (the Appellant) against the Order dated 04/02/14 (the Impugned Order) passed by the Respondent. The Appellant is a Trading Right Entitlement Certificate (the TREC) holder of the Karachi Stock Exchange Limited (the Exchange) and registered as a broker with the Securities and Exchange Commission of Pakistan (the Commission) under the Brokers and Agents Registration Rules, 2001 (the Rules). The brief facts of the Appeal are that the Respondent received a complaint on 20/06/13 from Abandoned Properties Organization (the Complainant) against the Appellant regarding non-transfer of shares into its CDC Investor Account No. 03277-64371. The Appellant agreed to pay the sale proceeds against disinvestment of Complainant shares vide facsimile dated 05/04/13 addressed to the Complainant. This fact implicates the Appellant into the alleged violation of mishandling/ use of Complainant shares without due authority. The alleged violations attracts the provisions of Rule 8 and 12 of the Rules and Section 24 of the Central Depositories Act, 1997 (the CDC Act), therefore a Show Cause Notice (the SCN) dated 09/10/13 was issued to the Appellant and the hearing was held on 05/12/13. During the course of hearing Mr. Ali Aslam Malik, Chief Executive Officer (the CEO) of the Appellant, appeared before the Respondent and admitted the facts of the SCN and provided verbal assurance that Complainant claim would be fully settled. He further assured that the copy of undertaking would be provided to the Respondent within one week of the date of hearing. Thereafter, the Exchange vide letter dated 03/01/14 provided a copy of the undertaking dated 30/12/13 whereby the Appellant undertook to clear all liabilities pending towards the Complainant by 31/03/14. However, after considering the facts of the case and admission of alleged violations committed by the Appellant, the Respondent imposed a penalty of Rs. 500,000 under Section 28 (2) of the CDC Act, 1997. 3. The Appellant has preferred the instant appeal…

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