A two-member bench of Supreme Court of Pakistan has removed the Chairman of Securities and Exchange Commission of Pakistan Muhammad Ali Ghulam Muhammad as his appointment is not found in accordance with the SECP Act 1997. A day earlier, SECP came out with a wishy-washy press release defending the Chairman instead of categorically naming the brokers as well as the media-house pressurising SECP to back off from investigating wrongdoings - which is the prime responsibility of the apex regulator. Both SECP and SBP are empowered by law with intrusive powers to insulate the savings of citizens against manipulation.
Therefore, nobody and we mean nobody should be able to prevent a regulator from doing its job. If regulatory bodies who perform a quasi-judicial function succumb to this kind of pressure, then the next causality will be the courts. Societies can survive dictatorship but not injustice.
Government has three main functions namely (i) Policymaking; (ii) Regulatory function to monitor the markets; and (iii) providing essential services which the private sector cannot. Since Pakistan has a dearth of capital, the government has also invested in capital intensive businesses and since 1971 has also taken over other business (where private sector can do a better job). Ministries being the repository of policymaking - present laws to the Parliament for implementation of these policies. Regulatory bodies make regulations under these laws and maintain an arms length relationship with both the government as well as with regulated stakeholders to create an even playing field. Regulators can only exercise this role effectively if they are provided with full financial and operational autonomy. PSE's are governed through their Board of Directors with ownership representation of line ministries. Rules to do so are framed by the Government under the laws promulgated by the Parliament.
Pakistan needs to have a proper search committee to pre-select head and members of Regulatory Bodies, Chairman and Chief Executives as well as outside directors on PSE's Board of Directors. This committee needs to interview and short-list candidates to the Government. So far we seem to make appointments on fancy and whim of the president or prime minister or a minister. They may choose the best person for the job but this could be subjected to objections; increasingly highlighted in media as well as challenged in courts.
Merely saying that this is done as per past practice. Prime Minister can appoint heads of Regulatory Bodies as well as Chairman and Chief Executives in PSE's is no more enough. Even civil servants need to go through a transparent process based upon their qualification and experience in a competing fashion to obtain better results. The Executive branch of the government does feel overwhelmed at the intrusive role being played by the courts. The courts can and do differ time to time as they interpret the constitution, laws, regulations and rules. The final word is of the Supreme Court. Accusing the highest court of some kind of discrimination may sound valid to some. However, there is very little option but to accept the verdict for sake of harmony in the society. Trichotomy of powers are provided in the constitution. What they are - only the Supreme Court can interpret. It does not matter if someone feels peeved or hurt. One just has to lump it and accept it gracefully and pray to Allah for mercy. If a proper laid down process is not usually followed - blaming the courts or an overactive media will no more suffice. We need to conceptualize the selection process with clarity from a panel otherwise the game of musical chairs which we are now witnessing would continue. We know some people feel that the courts are biased and are only doing all this to PPP appointees and the game of musical chairs would end if a PML (N)-led government is in place. We hope this is not true and courts will maintain their posture but with a sense of balance.
Saturday, April 13, 2013
Everyone fights for a chair
A two-member bench of Supreme Court of Pakistan has removed the Chairman of Securities and Exchange Commission of Pakistan Muhammad Ali Ghulam Muhammad as his appointment is not found in accordance with the SECP Act 1997. A day earlier, SECP came out with a wishy-washy press release defending the Chairman instead of categorically naming the brokers as well as the media-house pressurising SECP to back off from investigating wrongdoings - which is the prime responsibility of the apex regulator. Both SECP and SBP are empowered by law with intrusive powers to insulate the savings of citizens against manipulation.
Therefore, nobody and we mean nobody should be able to prevent a regulator from doing its job. If regulatory bodies who perform a quasi-judicial function succumb to this kind of pressure, then the next causality will be the courts. Societies can survive dictatorship but not injustice.
Government has three main functions namely (i) Policymaking; (ii) Regulatory function to monitor the markets; and (iii) providing essential services which the private sector cannot. Since Pakistan has a dearth of capital, the government has also invested in capital intensive businesses and since 1971 has also taken over other business (where private sector can do a better job). Ministries being the repository of policymaking - present laws to the Parliament for implementation of these policies. Regulatory bodies make regulations under these laws and maintain an arms length relationship with both the government as well as with regulated stakeholders to create an even playing field. Regulators can only exercise this role effectively if they are provided with full financial and operational autonomy. PSE's are governed through their Board of Directors with ownership representation of line ministries. Rules to do so are framed by the Government under the laws promulgated by the Parliament.
Pakistan needs to have a proper search committee to pre-select head and members of Regulatory Bodies, Chairman and Chief Executives as well as outside directors on PSE's Board of Directors. This committee needs to interview and short-list candidates to the Government. So far we seem to make appointments on fancy and whim of the president or prime minister or a minister. They may choose the best person for the job but this could be subjected to objections; increasingly highlighted in media as well as challenged in courts.
Merely saying that this is done as per past practice. Prime Minister can appoint heads of Regulatory Bodies as well as Chairman and Chief Executives in PSE's is no more enough. Even civil servants need to go through a transparent process based upon their qualification and experience in a competing fashion to obtain better results. The Executive branch of the government does feel overwhelmed at the intrusive role being played by the courts. The courts can and do differ time to time as they interpret the constitution, laws, regulations and rules. The final word is of the Supreme Court. Accusing the highest court of some kind of discrimination may sound valid to some. However, there is very little option but to accept the verdict for sake of harmony in the society. Trichotomy of powers are provided in the constitution. What they are - only the Supreme Court can interpret. It does not matter if someone feels peeved or hurt. One just has to lump it and accept it gracefully and pray to Allah for mercy. If a proper laid down process is not usually followed - blaming the courts or an overactive media will no more suffice. We need to conceptualize the selection process with clarity from a panel otherwise the game of musical chairs which we are now witnessing would continue. We know some people feel that the courts are biased and are only doing all this to PPP appointees and the game of musical chairs would end if a PML (N)-led government is in place. We hope this is not true and courts will maintain their posture but with a sense of balance.
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