Securities body accused of bid to coerce WEF partner

The World Economic Forum Global Competitiveness Report showed that Securities and Exchange Commission of Pakistan slipped from the 55th position in 2013 to 106 this year, raising questions over the regulatory regime’s effectiveness

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) allegedly pressured the local partner of the World Economic Forum (WEF) to change its results after the influential global survey showed a steep decline in the rating of the corporate sector regulator.

The WEF Global Competitiveness Report showed that SECP slipped from the 55th position in 2013 to 106 this year, raising questions over the regulatory regime’s effectiveness. WEF had engaged Mishal Pakistan to conduct surveys for its influential Global Competitiveness Report.

After Mishal CEO Amir Jahangir refused to ‘oblige’ the SECP, the regulator has decided to file a petition with the WEF, SECP officials said.

The Global Competitiveness Report 2016-17, which this time compared governance in 138 countries, ranked Pakistan 122 – 16th from the bottom. The report also showed that SECP further slipped to 106th position from previous year’s level of 93. Since the PMLN government came into power, SECP ranking has been worsening with every passing year. It stood at 55 in 2012-13.

“The SECP chairman pressurised me in his office to either change the rankings, issue a clari- fication regarding this or they will take up the matter with WEF,” Jahangir told The Express Tribune. He said the choice of words of the chairman and his senior staff was quite inappropriate, ‘bordering threats’. “So much so, the question was raised over my loyalty to the country,” said Jahangir.

The WEF report showed that out of 16 Pakistani departments, the performance of nine critical bodies deteriorated when compared at the global level. The performance of State Bank of Pakistan, SECP, Customs, Accountant General of Pakistan Revenue, Trade Development Authority of Pakistan and Civil Aviation Authority has further deteriorated.

The WEF report is considered one of the influential reports that influence the decision making of the global investors in taking deci- sions about their investments.

SECP is already in hot waters for not taking action against those whose names have appeared in Panama leaks, although its law binds it to move against those who have not declared their beneficial ownerships. It has identified 155 people whose names appeared in Panama Papers for owning offshore companies. These people are serving as directors at 600 Pakistani companies but none of them has been served with a notice.

Jahangir said SECP reached out to him to understand the methodology and rankings of the Global Competitiveness Report. He said SECP showed serious concerns over findings of the report and was “extremely perturbed over constant decline of its position.”

In SECP’s opinion, they have done wonders, which according to them have not been acknowledged in the report, said the Mishal CEO. He said the SECP team failed to understand the correct methodology on how the index is measured and constantly blamed the poor ranking on the business community not being asked the right questions about SECP.

“SECP also accused WEF of managing Pakistani respondents to get the desired results,” said Jahangir. The regulator, however, has denied it tried to coerce Jahangir.

“SECP is not satisfied with the results of the WEF survey but we have not pressurised the Mishal Pakistan CEO,” SECP spokesperson Bushra Aslam said.

She added that Jahangir had been called to explain the methodology of the survey but he could not give ‘concrete answers’.

SECP has decided to take up the matter with WEF and next week a petition will be filed, questioning the survey’s methodology, said the SECP spokeswoman. She said SECP Chairman Zafar Hijazi did not question Jahangir’s loyalty but said “being Pakistani, he should have projected a positive image of Pakistan.”

She also confirmed that the SECP chairman had concerns over choice of respondents on the grounds that a shopkeeper would not know the kind of work SECP was doing. The WEF report provides comprehensive detail about the respondents of each of 138 countries. Pakistan is now among the top 10 countries for the highest number of respondents in the world, only trailing behind the United States, China, India, Mexico and Russia.

Securities and Exchange Commission of Pakistan is already in hot waters for not taking action against those whose names have appeared in Panama leaks, although its law binds it to move against those who have not declared their beneficial ownerships