1. The matter arises from the show cause notices No.SMD/Co.62/3/2004-S dated December 06, 2005 issued by the Securities and Exchange Commission of Pakistan (the Commission) to (i) Mr. Mohammad Mehdi Jafri s/o Asghar Mehdi, NIC No.42101-6024677-9, address: C/o PPCL, 5th Floor, Siddiqsons Tower, 3-J.C.H.S. Sh. Faisal, Karachi (Applicant No 1) and (ii) Mr. Mohammad Mehdi Jafri s/o Asghar Mehdi NIC No.42101-6024677-9, address: A 122/9, Dastagir, F.B Area, Karachi (Applicant No 2).
2. Facts of the case are that Elixir Securities Pakistan (Pvt.) Ltd., Consultant to the Offer, on behalf of Pakistan Petroleum Limited (PPL) vide letter dated September 15, 2004 furnished to the Commission a list of cases of all those applicants which were detected by Sidat Hyder Morshed Associates (Pvt.)
Limited (the balloters to the offer) as being filed in violation of Section 18A of the Securities and Exchange Ordinance, 1969, which stipulates that: "(1) No person or any other person on his behalf shall make a fictitious application or submit more than one application for shares of companies offered to the public. (2) In case of contravention of the provisions of subsection (1), the application money shall be liable to confiscation."
Mr. Mohammad Jafri's name appeared in the aforementioned list of multiple applicants. One application bearing No. 12-12-284 was submitted through Metropolitan Bank Limited, Sharah-e- Faisal Branch, Karachi and the other application bearing No.11-65-227 was submitted through Muslim Commercial Bank Limited, Pakistan Chowk Branch, Karachi. Both the applications were submitted under the same name with the same NIC number and fathers name but with different signatures.
3. The Commission called for a written explanation from applicant No.1 vide letter dated October 06, 2004 at the address mentioned in application No.12-12-284 i.e. C/o PPCL, 5th Floor, Siddiqsons Tower, 3-J.C.H.S, Sh. Faisal, Karachi. He replied vide his letter dated October 11, 2004 that he had submitted only one application through Metropolitan Bank Limited, Shahrah-e- Faisal Branch, Karachi.
4. The Commission called for a written explanation from applicant No.2 vide letter dated December 06, 2004 at the address mentioned in the application at A.122/9, Dastagir, F.B Area Karachi. The said letter was also sent through his banker to the offer i.e. Muslim Commercial Bank Limited, Pakistan Chowk Branch, Karachi on March 30, 2005 however, so far no reply has been received from him.
5. In order to ascertain the factual position and to reach to a conclusion, the aforementioned show cause notices were issued and subsequently a hearing was held on December 13, 2005 at the Companies Registration Office, Karachi. During the course of the hearing, Mr. Mohammad Mehdi Jafri appeared in person stating that he submitted only one application No. 12-12-284 through Metropolitan Bank Limited, Shahrah-e-Faisal Branch, Karachi. He presented his original NIC in support of his arguments. He requested for the allotment of shares against his application No.12- 12-284.
6. I have considered the arguments presented before me by the applicant A perusal of the applications and correspondence exchanged in the matter reveals that these applications have been submitted by two different persons using the same NIC number and Father's Name but with different addresses & signatures. From the facts presented before me, it is evident that application No. 12-12-284 submitted by Mr. Mohammad Mehdi Jafri through Metropolitan Bank Limited, Shahrah-e- Faisal Branch Karachi is genuine, hence Privatisation Commission (the Offerer) may be advised to allot shares against application No.12-12-284 submitted by Mr. Mohammad Mehdi Jafri through Metropolitan Bank Limited, Shahrah-e- Faisal Branch, Karachi, as the same was declared successful in the ballot and was detected in post ballot scrutiny.
7. The identity of applicant no 1 has been established as Mr. Mohammad Mehdi Jafri appeared in person before me and since no one appeared before me in response to show cause notice No.SMD/Co.62/2/2004-S dated December 06, 2005, claiming Application No.11-65-227 also filed in the name of Mr. Mohammad Mehdi Jafri bearing the address Muslim Commercial Bank Limited, Pakistan Chowk Karachi, therefore, it is evident that Application No.11-65-227 is fictitious.
Accordingly, the subscription money deposited against the said fictitious application be confiscated under subsection (2) of Section 18-A of Securities and Exchange Ordinance, 1969. The Offerer is advised to deposit the subscription money so confiscated against application No.11-65- 227 in the designated bank account maintained in the name of Securities and Exchange Commission of Pakistan with Habib Bank Limited within thirty days from the receipt of this Order and furnish receipted challans to the Commission.
8. Further, the State Bank of Pakistan (SBP) is requested to investigate the opening of account No. 4150-5, in the name of Mr. Mohammad Mehdi Jafri by Muslim Commercial Bank Ltd, Pakistan Chowk Branch, Karachi without conducting proper due diligence. Based on the findings of the investigation carried out, SBP is requested to take appropriate action against the concerned individuals/parties under intimation to this office.