HC rules on SEC member
The High Court yesterday issued a rule upon the government to explain within four weeks why the finance ministry should not be directed to declare Mansur Alam, a member of Securities and Exchange Commission (SEC), as disqualified to continue his office for abusing powers.
An HC bench of Justice AHM Shamsuddin Chowdhury Manik and Justice Sheikh Md Zakir Hossain came up with the rule following a writ petition filed by Syed Shafiqul Alam, a retail investor, claiming that Mansur Alam is disqualified to hold the office.
Shafiqul filed the petition yesterday following an unprecedented fall in share prices on December 8.
Market insiders had blamed the day's historic fall on the market regulator's two directives. One of the directives squeezed "netting facilities" and stopped the investors from buying new shares with funds from another share sale, which was ordered but not finalised.
Another directive was on executing buy orders only after cashing an investor's cheque.
The directives were issued as per instruction by Mansur Alam, who did not receive prior consent from the SEC chairman in giving the directives.
Shafiqul in his petition stated that Mansur Alam on December 6 and 7 issued two separate directives on share buy after encashment of cheques and strict executing of netting facilities, abusing the SEC powers and violating its rules.
Only the commission, which is comprised of its chairman and three members, or its majority, is empowered to issue any directive as per section 20 (A) of Securities and Exchange Ordinance 1969, the petition said.
The petitioner also said that if the chairman or any member of the SEC abused its powers and violates rules, they cannot hold the offices as per section 6(Gha) of Securities and Exchange Ordinance 1993.
Finance Secretary Mohammad Tareque, SEC Chairman Ziaul Haque Khondker, Executive Director Saifur Rahman, and Member Mansur Alam have been made respondents to the rule.
Barrister Abul Kalam Azad appeared for the petitioner.
Market insiders see the petition as "excesses" by the investor.
They said whoever or whatever the reasons were behind the December 8 fall in the market, the SEC took immediate action, for which the market recovered most of the losses on that day and closed higher on the following day.
The commission also served show-cause notice on the member concerned.
"We always look after the interest of the retail investors at first, and you see that we took immediate steps on Wednesday," said the SEC chairman.
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