Law: Securities and Exchange Ordinance, 1969

Section: 15,15A,15-E

Securities and Exchange Ordinance (XVII of 1969)--Ss. 15-A & 15-E---Purchase and sale of shares by Director in his personal account illegally---Director of public unlisted company and also a Chief Executive Officer, started purchasing the shares of other companies in his personal account---Director was established to have indulged in Insider Trading' by purchasing shares of other companies in violation of S.15-A of Securities and Exchange Ordinance, 1969 on the basis of insider information relating to investment; and subsequently selling the shares at the substantial profit---Written reply submitted by the Director to show-cause notice issued to him being unsatisfactory, Commission taking a lenient view in the light of the agreement shown by the Director to repay the total amount of profit earned by him from such transactions, in exercise of powers under S.15-E of Securities and Exchange Ordinance, 1969, directed him to pay fine of Rs.800,000 for contravention of subsection (1) of S. 15A of the Ordinance, and to pay a sum of Rs.7,897,525 to the company under S.15-E(2)(ii) of said Ordinance. ORDER IMRAN INAYAT BUTT, DIRECTOR (SMD).---This order shall dispose of the proceedings initiated through Show-Cause Notice bearing No. 1(6) PIL/MSW/SMD/2011/03 dated March 24, 2011 ("SCN") under section 15E of the Securities and Exchange Ordinance, 1969 ("the Ordinance") issued by the Securities and Exchange Commission of Pakistan ("the Commission") to Mr. Ghulam Muhammad ("the Respondent"). 2. At the outset, it is imperative to give an account of the facts relating to the case. The respondent is the Chief Executive Officer ("CEO") and Director of Excel Insurance Company Limited ("EICL"), which is a public unlisted company. The respondent also holds 2,901,856 shares of EICL representing 11.60% of its shareholding. In addition to this, the wife of respondent, Mrs. Shagufta Ghulam, is also a Director of EICL and holds 11,987,188 of its shares or 47.94% shareholding. 3. On December 14, 2010, a meeting of Board of Directors ("BoD") of EICL was held which was also attended by the respondent. The BoD discussed the prospects of investment in the shares of PICIC Insurance…

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