Poor’s president quits after US rating downgrade
NEW YORK, Aug 23: Standard and Poor’s President Deven Sharma is stepping down, its parent company announced, just weeks after the credit rating agency cut the US top AAA rating and sent global markets into turmoil.
Sharma, who will take another role in the company before leaving altogether at the end of the year, will be replaced by Citibank’s current chief operating officer Douglas Peterson, corporate parent McGraw-Hill said in a statement late Monday.
The US Justice Department is currently investigating the company for its practices regarding mortgage securities that helped trigger the 2008 global financial crisis.
Sharma, 55, “will take on a special assignment working on the company’s strategic portfolio review until the end of the year when he will leave the company to pursue other opportunities,” the statement read, adding that Peterson, 53, will become the S&P president starting September 12.
Harold McGraw III, chairman, president and CEO of The McGraw-Hill Companies, described Peterson as “a seasoned executive with more than 25 years of global experience in financial services, risk management and capital markets.”
Peterson’s resume includes his role as the CEO of Citigroup Japan from 2004 to 2010, the statement read.
McGraw thanked Sharma “for his dedicated leadership of S&P.”
US officials lashed out at S&P after it docked the country’s credit rating from AAA to AA+, accusing the agency of committing a $2 trillion math error and of using a faulty baseline. S&P has stood by its analysis.
S&P said the August 5 decision to downgrade the US long-term credit rating came as a result of divided US lawmakers failing to agree on a deal to reduce the ballooning US public debt by some $4 trillion over 10 years.
The decision followed a bruising fight on Capitol Hill over raising the country’s congressionally-set debt ceiling, which resulted in a limited agreement to cut some $2 trillion over that period.
The Justice Department probe, launched before the credit downgrade, is looking at whether S&P analysts wanted to lower the ratings of certain bonds backed by mortgage debt but were prevented from doing so by superiors due to business concerns.
—AFP
SECP chief’s appointment challenged in SC
ISLAMABAD: A two-judge bench of the Supreme Court will take up on Friday a petition challenging the appointment of Mohammad Ali Ghulam Mohammad as chairman of the Securities and Exchange Commission of Pakistan (SECP).
The petition, moved by former chief of the SECP’s legal department Mohammad Ashraf Tiwana, requests the court to ask the government to immediately appoint a new chairman and commissioners to complete the constitution of the commission with persons of integrity, competence and professionalism who have no direct or remote conflict of interest and are not the nominees and cronies of lobbies and interest groups in the regulated sectors.
Being an autonomous statutory body, the SECP regulates corporate and financial sectors and all corporate entities and companies across Pakistan, including the securities market, non-banking finance sector, insurance industry, stock markets, credit rating agencies, brokers, surveyors and auditors.
According to media reports, Mohammad Ali who was appointed as SECP chairman on Dec 24 last year is the largest shareholder and director of a private brokerage firm — Fortune Securities Limited.
The federal government through finance secretary, SECP chairman, policy board secretary, finance division, commissioner (company law division) and director of the SECP’s human resource department are respondents in the petition.
The petition highlighted some regulatory failures of the SECP, including the stock market crashes of 2005 and 2008 and debacle of the National Insurance Company Limited.
“Despite hectic efforts by parliamentary committees, the culprits of the 2005 market crash have not yet been identified, lest being punished. Similarly, the causes of the 2008 market crisis have not been investigated,” the petitioner said.
The petition requested the apex court to declare the appointment of individuals who are either members of stock and commodity exchanges or brokers, directors or shareholders of brokerage companies as commissioners or chairman of the SECP as against the law, equity, justice, fairness, public policy and ultra vires of the law, Constitution and principles of natural justice.
The petitioner also requested the court to strike down Section 5 (5) of the SECP Act introduced through Finance Act 2003 for violating constitutional provisions like Articles 73 (procedure with respect to money bills) and 75 (president’s assent to bills).
Section 5 (5) of the SECP Act 1997 states: “No act or proceeding of the commission shall be invalid by reason only of the existence of a vacancy in, or defect in the constitution of the commission.”
This insertion was given effect through the Finance Act 2003, but the Supreme Court through the 2009 Sindh High Court Bar Association case and the 2010 National Bank of Pakistan case held that changes introduced through the finance act were unconstitutional.
The petitioner is of the opinion that the commission is not properly constituted and its affairs are being illegally run by the chairman and commissioner Tahir Mehmood under the garb of Section 5(5) of the SECP Act and thus resulting in the failure of the apex regulator to discharge its duty in accordance with the law. The petitioner called for necessary amendments to the existing SECP Act as well as to a new SECP bill pending in parliament in a way to prohibit appointment of individuals with conflict of interest as commissioners and chairman of the SECP in future and ensure avoidance of “regulatory capture” of the organisation in line with best international practices.
The petitioner requested the court to strike down the June 13 termination order of the petitioner and declare the decision to abolish the SECP’s law division as illegal for being mala fide and against public interest.
Pakistan warns US on aid cuts
* President tells US delegation any cut in assistance will not only impact Pakistan’s existing economic conditions but will also send a negative signal to public about US
* Hopes all such legislations and uncalled for moves will be avoided
ISLAMABAD: President Asif Ali Zardari on Tuesday said that any cut in the US assistance would not only impact Pakistan’s existing economic conditions but would also send a negative signal to the public about commitment of the US government towards the people of Pakistan when they are suffering heavily in economic terms due to unparalleled toll of war against terror.
The president was talking to a US delegation comprising Senator Carl Levin, Senator Jeff Merkley, Senator Jeanne Shaheen and other senior officials, including that of the US embassy in Islamabad during a meeting at Presidency on Tuesday.
Discussing some recent developments, the president said that Pakistan was concerned about the reports of proposed slash in US assistance for the country.
He said that Pakistan shared common objectives with the United States in the region and was ready to work with international community for reconciliation and peace in Afghanistan.
He said both the countries needed to avoid all actions that send negative signal and prove to be counter-productive in a bid to forge a collaborative and comprehensive partnership.
Emphasising the need to avoid all such legislations and uncalled for moves, the president hoped that all such steps would be avoided.
From the Pakistan side, Defence Minister Chaudhry Ahmed Mukhtar, General Secretary M Salman Faruqui, Senator Syeda Sughra Imam, Acting Foreign Secretary Dr Alamgir Babar and Spokesperson to the President Farhatullah Babar attended the meeting.
Matters relating to Pak-US bilateral relations, war against terror and regional situation were discussed in the meeting.
Zardari said that both the countries had invested substantially on building the process of strategic dialogue and “we must not allow some incidents to roll back the labour of building an enduring and multifaceted equation as it was no option for the two countries at this critical time”.
The president said, “Drag on our relations due to operation irritants can effectively be avoided if the terms of engagements were clearly defined and followed in their true essence by the two countries.”
About the fight against terrorism, the president said that Pakistan had offered huge sacrifices in this war.
He said that the militants were created and nurtured by the international community to defeat a rival ideology.
At that time the mujahideen were likened as `the moral equivalents of George Washington’, the president said and added that it was the responsibility of the international community to help Pakistan in the fight against terrorists.
Zardari said that the people of Pakistan, especially those of the Tribal Areas, were the worst sufferers of militancy and there was an urgent need to focus on their socio-economic development and to bring qualitative change in their lives in order to win the battle of hearts and minds.
Senator Carl Levin thanked the president for meeting the delegation and appreciated Pakistan’s struggle against militants.
Separately, Prime Minister Yousaf Raza Gilani stressed that relations between the United States and Pakistan should go beyond terrorism and cover areas of bilateral relations on durable basis for the benefit of two peoples.
Talking to Senator Carl Levin, Chairman of Armed Services Committee at the Prime Minister’s House, Gilani said that Pakistan had suffered in the fight against terrorism and rendered more sacrifices in terms of civilians and troops’ fatalities than the coalition partners put together.
He said, “The success of military operation in Malakand Division stands out because the nation not only defeated the terrorists but also managed the return of more than two million IDPs (internally displaced persons) within two months to their homes with honour and dignity”.
The prime minister said that Pakistan desired a sovereign, independent, peaceful, stable and prosperous Afghanistan. app
BRIEF NEWS:
Strike against killings grinds Karachi to a halt
KARACHI: All business and social activities came to a grinding halt on Tuesday as a mourning day was observed in the provincial capital on the call of the Muttahida Qaumi Movement (MQM) against what it called ‘the genocide of Muhajirs’. All markets, bazaars, shops, hotels and other business places were closed across the metropolis from dawn to dusk while public transport also remained off the roads. The people preferred to stay indoors because of fear of vandalism and terrorism. The markets and shops were also closed in several other cities of Sindh, including Hyderabad, Nawabshah, Mirpurkhas and Tando Allahyar in response to the mourning day call. The metropolis wore a deserted look amid panic and fear. Black flags were hoisted in almost every area of the city. Schools, colleges and universities were also closed while the attendance in private and public organisations also remained thin. The inhabitants of Gulistan-e-Jauhar staged a protest demonstration against the killings of Karachiites on ethnic ground. The protesters, wearing black armbands and carrying black flags, burnt tyres and chanted slogans against the lawlessness. Reports of aerial firing were also received from Gulshan-e-Iqbal, Gulistan-e-Jauhar, Malir, Landhi, Mosamiat, Saddar and other areas of the city. Angry mobs also pelted moving vehicles with stones in various areas of the city on major thoroughfares. The situation compelled many office-goers, who attempted to reach their work places, to return homes because of no vehicles on roads. The import cargo could not leave the port area while no export freight reached the port, as transporters were reluctant to bring their vehicles on the city roads because of panic and fear. Although the government, responding to the MQM announcement, had made arrangements to man the thoroughfares for protection of the people, the fear factor had prevailed. “We cannot take any risk and this is also last ‘Ashra’ of Ramazan and we prefer to spend most of our time in prayers,” said Rajab Ali, a clerk in a government office. Many of the factory owners, with deadline to be met for consignments, had asked their workers to stay back in the factory premises. Some private companies had arranged transportation for their employees. Since the public transport owners association had announced to keep their vehicles off the roads and the numbers of these means of transport had markedly shrunk since Monday evening, many of the people themselves did not make any attempt to come out of their homes on Tuesday morning. atif raza
Mohammed Saleem Mansoori
