Influential commissioner keeps stake while earning Rs35m salary
Tariq Khattak
ISLAMABAD: Despite drawing an elite annual salary exceeding Rs35 million, a commissioner at the Securities and Exchange Commission of Pakistan has maintained a financial stake in a consultancy firm advising companies regulated by his own office, a conflict emerging amid a Rs14.4 billion audit scandal exposing systematic governance failures at the country’s top market regulator.
Commissioner Abdul Rehman Warraich holds 13,333 shares in Marigolds Consulting Private Limited according to SECP’s Annual Report 2024, a shareholding that persists even as he collects Rs35.64 million in annual compensation including security details costing Rs1.70 million, driver and orderly services totaling Rs720,000 petrol allowances of Rs1.19 million, and access to a Rs110.94 million Rest and Recreation fund distributed among SECP executives without Finance Division approval.
Section 17 of SECP Act 1997 explicitly prohibits commissioners from engaging in business activities that may interfere with regulatory duties or create financial interests that could compromise impartial decision making. The provision requires commissioners to maintain complete independence from regulated market participants to preserve public trust in decisions affecting corporate governance, securities markets, and insurance oversight.
The Auditor General of Pakistan has exposed unauthorized salary increases and withholding of Rs14 billion from the Federal Consolidated Fund, a violation of the Public Finance Management Act. The violations include Rs6.99 billion in surplus funds diverted to internal reserves instead of depositing in federal treasury, and Rs644.8 million in unauthorized executive compensation approved through backdated Policy Board decisions in October 2024.
The consultancy conflict raises fundamental questions about regulatory judgment when commissioners maintain business relationships with the same market participants seeking SECP licenses, approvals, and enforcement relief. If Marigolds Consulting advises companies on securities offerings, corporate compliance, or regulatory approvals, Warraich’s financial stake in the firm’s commercial success creates direct conflicts with his oversight responsibilities, sources said.
International regulatory standards at the US Securities and Exchange Commission, Securities and Exchange Board of India and regulators in dozens of countries maintain absolute prohibitions on financial interests in regulated entities, requiring commissioners to divest all conflicting stakes before assuming office. These jurisdictions recognize that elite public salaries exist specifically to eliminate financial incentives for commissioners to maintain private business relationships with market participants.
The enforcement gap proves systematic rather than isolated. While SECP’s annual report discloses Warraich’s consultancy shares under transparency requirements, no mechanism exists to compel divestment or explain why the statutory prohibition fails to apply. The disclosure serves as legal cover allowing conflicts to persist while SECP collects elite compensation funded by fees paid by the same companies seeking consultancy services, insiders informed.
The Senate Standing Committee on Finance and Revenue has pressed SECP leadership multiple times on audit violations but to no avail as SECP has not deposited Rs14 billion in public funds in federal treasury.
The case exposes how elite compensation fails to ensure regulatory independence when institutional culture prioritizes executive privileges over legal compliance. Commissioners receiving Rs35-43 million in annual packages plus premium security, luxury vehicle allowances, and foreign travel funds through discretionary budgets should have zero financial incentive to maintain shareholdings in firms serving regulated entities.
According to regulatory sources, an influential commissioner is alleged to be securing undue benefits and regulatory relaxations through reported connections with a senior finance ministry official.
The pattern suggests institutional culture where leadership exempts itself from legal constraints binding on market participants it regulates, undermining the fundamental premise that regulators must maintain higher standards than those they oversee. SECP officials were not available to comment on the issue.
The business community says that this institution once facilitated them, but by taking on the role of a policeman, it has now become a major problem for companies and the economy.
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