ISLAMABAD - The Securities and Exchange Commission of Pakistan has ruled out stock market manipulation case in shares of gas utilities following raise in ceiling of Unaccounted for Gas (UFG).
SECP top management had ordered inquiry in January this year which took six months to complete which examines the trading patterns of all investors and brokers in the market near the time of UFG change for gas utilities and after that. After detailed examination, it has concluded that no manipulation has taken place.
According to the investigation report while examining trading data, investigators observed that the rise in price of the shares of SSGC and SNGPL was mainly attributed to accumulation of shares by six entities including National Bank of Pakistan (NBP), NIT-State Enterprise Fund (NIT-SEF) and four provident/gratuity funds of SSGC Employees Funds.
Review of information showed that on September 22, 2010 Aqeel Karim Dhedhi Securities (Pvt) Limited sold 15 million shares of SSGC at Rs 17.50 per share in off-market IGI Finex Securities Limited which is quite below the prevailing market price. These shares were pledged with MCB Bank Limited prior to sale.
AKD Group started selling shares from September 29, 2010 after the date of announcement of OGRA decision on SSGC revenue petition dated September 24, 2010.This trading pattern does not indicate that AKD Group members were engaged in insider trading as the shares sold by the AKD Group were bought at considerable time period before the decision of OGRA dated 24, 2010.Moreover, shares sold prior to OGRA decision were sold in off market at a price much lower than the prevailing market price.
As per the statement of the officials of AKD Group, shares of SSGC and SNGPL were sold by the group in order to cater to liquidity problem faced by it. The said claim was supported by the documents provided which included copies of letters from the banks of overdue mark up against financial facilities availed by the Group entities.