Serious federal fund violations go unexamined
Who profited from SECP’s unlawful fund holdback?
Staff Report
ISLAMABAD: Parliamentary oversight committees have been diligently probing the annual compensation of Rs41 million for the Securities and Exchange Commission of Pakistan (SECP) chairman. However, this scrutiny has been disproportionately high, overshadowing the urgent need to address the regulator’s failure to deposit Rs14 billion into the Federal Consolidated Fund (FCF). This imbalance in scrutiny underscores the immediate need to address the issue and raises questions about legislative priorities and who may have benefited from withholding public funds.
The Public Accounts Committee and the Senate Standing Committee on Finance have focused extensively on executive pay, even as the far larger issue of a Rs 14 billion shortfall in federal receipts, flagged by the Auditor General of Pakistan (AGP), has received minimal attention.
According to AGP findings, the SECP did not transfer Rs 14 billion in surplus revenues to the FCF. These funds could have significantly bolstered public services, including healthcare, education, and infrastructure development, improving the lives of many citizens.
The audit also flagged Rs 377.22 million in irregular salaries and perks, and entertainment allowances. These raises were retroactively approved by the SECP Policy Board, which the AGP says lacks legal authority. The Finance Division was bypassed.
Business leaders have questioned why committees focus on individual salaries while systemic governance failures go unexamined. A lawyer noted that debating million-rupee pay while billions sit in regulatory accounts reflects skewed priorities.
The withheld funds also raise questions about accrued interest and usage. A 10 per cent annual return on Rs 14 billion implies roughly Rs 1.4 billion in earnings. This underscores the necessity of an investigation to determine who captured these returns or used them off-budget.
The SECP has offered no public defence for withholding deposits. It disputed some audit findings on allowances but stayed silent on the core deposit issue, which underscores the need for transparency and accountability and also raises concerns about the SECP’s willingness to address and rectify its financial irregularities.
Across committee meetings, most lawmakers questioned salary structures and perks. The Rs14 billion mismanagement drew only passing mention, with no follow-up scheduled. The Finance Division has less than 30 days to rationalise regulatory salaries, yet no timeline exists to recover the withheld deposits or identify beneficiaries. This lack of investigation into the core issue is a cause for concern.
This selective focus is striking, as the chairman’s annual compensation amounts to approximately 0.3 per cent of the funds withheld. The pattern highlights a broader oversight problem, as structural failures remain largely unaddressed.
Recent reports published by Daily Quwat (July 24 and August 24) and Daily Choice (August 25) have also raised concerns. These publications have alleged that Executive Director Asif Jalal Bhatti and Commissioner Abdul Rehman Warraich are involved in pressuring an insurance company to settle fraudulent claims. The reports also allege that the company faced reputational and financial repercussions for resisting such pressure.
It is important to note that these allegations remain unverified, and no independent evidence has been presented to substantiate them. Neither the SECP nor the officials have issued a public response to date.
Criticism has also arisen over the lack of engagement from SECP leadership. The Chairman of the SECP has not commented publicly on the matter, and no formal statement or rebuttal has been provided by the Commission’s media wing, despite efforts. A parliamentary committee has yet to address this issue.
The situation has prompted renewed calls for greater transparency and accountability, as an official response would help clarify the matter and address growing public concerns. These principles are crucial in ensuring good governance and maintaining public trust, sources said.
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