PRO 14-12-2012_Layout 1 12/14/2012 12:00 AM Page 1
Friday, 14 December, 2012
US satisfied with Pakistan’s economic reforms
Trade euphoria with India snubbed by Indian subsidies
Officials tell Dr Hafeez Shaikh CSF would be released soon ISLAMABAD
U
APP
S Ambassador to Pakistan Richard G. Oslan and Senior Adviser to US Special Representative for Afghanistan and Pakistan Robin Raphel called on Federal Minister for Finance Dr Abdul Hafeez Shaikh on Thursday. Oslon and Raphel congratulated the finance minister over his successful visit to United States and expressed satisfaction over the pace of institutionalising economic reforms in Pakistan. Dr Abdul Hafeez Shaikh informed the US delegation that the economic indicators of the country were on a positive course despite energy scarcity and a deteriorating se-
curity situation. Dr Hafeez informed the US delegation that Pakistan boasts the lowest inflation rate in the region and told that the trade balance deficit of Pakistan was declining. The US assured the finance minis-
ter that Coalition Support Fund amounting to $ 600 million would be released soon. The delegation added that the US would sanction an 80 million dollar Pakistan Investment Fund for SMEs in January 2013.
The US delegation assured the finance minister that active participation of Overseas Private Investment Corporation (OPIC) in development of Pakistan would be ensured. The active participation of OPIC has a potential to increase the monetary support for projects in Pakistan from $ 100 million to $ 1 billion. The visiting US delegation also reaffirmed US commitment for provision of $ 200 million for Diamer Bhasha Dam. Bilateral PAk-US trade was also on the agenda of the meeting and Olson assured Dr Hafeez of facilitating trade between the two allies. Richard Olson said that US would extend optimum cooperation towards development projects in Pakistan apart from the grants already pledged for overcoming the energy crisis and for development of social sector and infrastructure.
ISLAMABAD Online
Dada at helm of commodity exchange KARACHI
SECP takes punitive action against companies’ directors, auditors ISLAMABAD
STAFF RePORT
STAFF RePORT
Shazad G Dada took charge as the chairman of the board of Pakistan Mercantile Exchange (PMEX )on Thursday. The board unanimously elected Dada as its new chairman during PMEX’s session of December 5. The SECP appointed Dada, Muhammad Hanif Jakhura and Syed Ali Sultan as independent directors to the PMEX Board. Dada is serving as the chief executive officer of the Barclays Bank PLC, Pakistan since 2010. Dada graduated from University of Pennsylvania and holds Bachelor of Science and Bachelor of Arts degrees. He did his MBA from The Wharton School, University of Pennsylvania. His prior work assignments include various senior positions in the Deutsche Bank AG, both in Pakistan and the US. Dada has a 23 years experience of financial markets. Dada is also serving as Chairman of the Pakistan Banks Association, Board Member of the Karachi Stock Exchange (KSE), Vice President of The Institute of Bankers Pakistan (IBP) and Chairperson - Finance Committee of IBP. In addition, Dada is associated with various charitable and educational organizations. Meanwhile Muhammad Hanif Jakhura boasts a vast capital market experience of over ten years during which he was enrolled with important capital market institutions. He has been serving as the CEO of the Central Depository Company since 2002 and has also served as the CEO of the National Clearing Company of Pakistan Limited from 2002 till 2005. Similarly Syed Ali Sultan is a senior professional in the banking arena and has a financial market experience of twenty years. He is currently the Group Head- Treasury, Investments and Financial Institutions - Bank Alfalah Limited. His prior work experience includes senior management and board positions on the State Bank of Pakistan, BNP Paribas Bank, Bahrain and the Standard Chartered Bank.
The Securities and Exchange Commission of Pakistan (SECP) drafted regulatory and punitive actions against companies, directors and auditors to safeguard the interests of investors. Addressing the abuse of powers by directors of listed and un-listed companies, the Securities and Exchange Commission of Pakistan (SECP) issued show-cause notices to 23 companies in the month of November. It was found during the inspection of annual reports and financial statements, that the companies were involved in un-author i z e d inter-corporate financing, irregularities in provident funds, fudged financial statements, improper circulation of financial statements and un-authorized utilization of security deposits. In November, the enforcement department allowed a listed com-
pany to issue of preference shares. The issuance of preferred shares resulted into injunction of capital of Rs2.4 billion in the corporate entity. Relaxation was also allowed to another listed company from the requirements of Companies (Issue of Capital) Rules, 1996. There were four companies that were found unable to organize their
mandatory Annual General Meetings (AGMs) in the given schedule. These companies were directed to conduct their annual general meetings, while two companies were directed to issue addendum to the notice of annual general meeting/extra-ordinary general meeting. Meanwhile, a listed company was also allowed to change the place of its annual general meeting. During the month, the enforcement wing also received 12 complaints from investors mainly related to non-declaration of dividends, non-receipt of annual accounts, non-receipt of dividend warrant and issuance of duplicate shares. The complaints were resolved after initiating necessary actions. The enforcement department also directed four listed companies to place their quarterly accounts on their website for dissemination of information to their shareholders. Furthermore, exemption was granted to two companies from preparation of their consolidated financial statements.
Pakistani farmers are not averse to trade with India but expect to be protected against the highly subsidised mammoth agricultural base of India. Harvest Trading CEO Member Export ICCI Ahmad Jawad on Thursday said that “we believe in trade diplomacy and peace is vital for a long term relationship. It is a matter of satisfaction that both India and Pakistan are moving forward in the right direction through the composite dialogue framework. However Agriculture is the back bone of our economy and Pakistani Farmers are not against trade with India but they expect to be protected against the highly subsidised agriculture products of India”. On average, one agricultural hectare is granted an annual subsidy of $300 in India. This works out to be around Rs 11,900 per acre of subsidy. Indian farmers have a comparative advantage of Rs 400 per 40kg on average. Jawad feared that the balance of trade was tilting towards India and greater people-to-people contacts were essential to channelize bilateral trade in an efficient manner. He hoped that Pakistan would secure GSP Plus in EU by 2014. Currently, the non tariff barriers being faced by Pakistani exporters are creating enormous hurdles in bridging the trust deficit. However, recent measures adopted by the Indian government are encouraging and being lauded in Pakistan. Jawad urged the governments of both countries to provide adequate infrastructure and modern integrated check-posts at the Khokrapar-Monabao border at the earliest to further increase bilateral trade on the pattern of Wagah-Attari border.
PIA no where neAr A fIscAl clIff ISLAMABAD APP
PIA has maintained a healthy financial profile denominated in both Pak rupees and foreign currencies. A PIA spokesman on condition of anonymity told that the airline was managing accounts in Pakistan and abroad and said that “just a single local bank account has enough funds to meet daily operating expenses.” It was also learnt that PIA had significant deposits to its name in a Middle Eastern and a North American Banks. The airline maintains more than two dozen ac-
counts across the globe and the PIA spokesperson told that “no PIA cheque relating to Provident Fund had ever bounced and the Provident fund account has a balance of more than Rs. 26 billion invested for profits. The Salaries of the employees’ are paid at the end of each month directly into the bank accounts of the employees’. The outsourced employees are paid by the Service provider and not by PIA”. The recent spade of ill informed media mongering regarding bankruptcy of PIA damaged the goodwill the National Flag Carrier enjoyed the world over.