Oil & Gas Development Corporation - Securities and Exchange ...

Investigation Report 

Callmate Telips Telecommunication Co. Ltd 

For the Period November 7, 2006 to December 8, 2006 

Securities & Exchange Commission of Pakistan 

Securities Market Division 

April 10, 2007 1

TABLE OF CONTENT PAGE 

1. EXECUTIVE SUMMARY 03 

2. CORPORATE INFORMATION OF THE COMPNAY INCLUDING 

LIST OF BOARD OF DIRECTORS 07 

3. EVENTS LEADING INITIATION OF INQUIRY 08 

4. METHODOLOGY ADOPTED TO CONDUCT PROBE INTO CTTL AND 

TRADING IN ITS SHARES 13 

5. DETAILED INVESTIGATION REPORT FOR EACH MAJOR PLAYER 14 

FINDINGS RELATED TO INDIVIDUAL MEMBERS OF THE GROUP 14 

MOHAMMAD AJMAL ANSARI (MAA) 18 

ASIM FAYYAZ QUERSHI (AFQ) 24 

NAVEED HAIDER BUKHARI (NHB) 30 

MUHAMMAD ASHRAF KHAN (MAK) 35 

IRFAN MEHMOOD (IM) 40 

HISAR ANSARI (HA) 48 

NADEEM AHMED KHAN (NAK) 51 

FIRST PAKISTAN SECURITIES LIMITED ((FPS) 54 

MIRZA USMAN BAIG (MUB) 59 

MUHAMMAD HASSAN (MH) 61 

FINDINGS RELATED TO BROKERS 64 

ORIX INVESSTMENT BANK LIMITED 65 

AL-HOQANI SECURITIES 70 

FIRST NATIONAL EQUITIES LIMITED 76 

SHAHID ALI HABIB SECURITIES 82 

NOMAN ABID SECURITIES 84 

FIRST CAPITAL EQUITIES LIMITED 85 

FIRST PAKISTAN SECURITIES LIMITED 86 

FINDINGS RELATED TO OTHER ACTIVE TRADING PERSONS 89 

JUNAID HABIB (JH) 89 

MUHAMMAD AQEEL (MA) 92 

HABIB UN NISA (HUN) 94 

ALISHBA NAZ (ALN) 97 

ABIDA NASREEN (AN) 99 

MUHAMMAD YASEEN (MY) 101 

6. REGULATORY WEAKNESSES IDENTIFIED AT KSE 104 

7. ANNEXURES 107 

April 10, 2007 2

1 EXECUTIVE SUMMARY 

Consequent to the unusual trading behaviour in the shares of Callmate Telips Telecom 

Company Ltd., (CTTL) the Securities & Exchange Commission of Pakistan (the 

Commission) initiated an investigation into the matter. From an analysis of the trading 

data, (reviewed at a broker level as well as the client level) , using Universal Identification 

Number database, it appeared that a group of persons (the Group) acting in concert and 

including key officials of CTTL as well as members of the Ansari family, were involved in 

insider trading and price manipulation of CTTL shares. 

On the one hand, the price of scrip was escalated by buying large quantity of scrip on 

upticks, whereas, on the other hand an artificial turnover was generated by buying and 

selling CTTL shares within the Group. The price of the scrip was manipulated by placing 

abnormal bids (upper locks) and offers (lower locks), during pre-open sessions. Shares 

were bought from various Brokerage Houses and financing was obtained through the CFS 

market. By generating artificial turnover as well as manipulating prices upward and 

downward, profits were generated which were then used to acquire fresh CTTL shares. 

Furthermore, CFS was rolled over on a daily basis and paper profits extracted at the 

expense of the CFS market. As a result of these prohibited activites, by Dec 8, 2006 the 

Group had acquired 80.95% of the share capital of CTTL. 

It was observed in the course of the investigation, that a large quantity of shares and cash 

was being transferred from one member of the Group to another, without any apparent 

consideration. One of the major shareholder of CTTL, Mr. Ahmed Jamil Ansari, transferred 

11.5 million shares of CTTL from his investor account to the sub account of Mr. Irfan 

Mehmood maintained with Al-Hoqani Securities on November 8, 2006. Irfan Mehmood, 

brother of Mr. Imran Mehmood, CFO of CTTL, has also been found to be a key player in 

the Group and has been involved in price manipulation and other prohibited practices. 

Further, our investigation has revealed that the CFO of CTTL, Mr. Imran Mehmood, and 

his family members have been involved in insider trading and other fraudulent practices. 

Mr. Syed Mehmood-ul-Hasan, the father of CFO of CTTL, has been identified by 

A.F.Fergusons & Co. (the ex-auditors) in their qualified draft audit report for his 

involvement in suspicious property related deals entered into by the management of CTTL. 

Mr. Irfan Mehmood, the brother of the CFO of CTTL, played an active frontline role in the 

insider trading and market manipulation carried out by the Group. Mr. Kamran Mehmood, 

April 10, 2007 3

another brother of the CFO of CTTL, has also assisted the Group in their insider trading 

and holds some shares of CTTL. 

Some brokerage houses especially Orix Investment Bank, First National Equities Ltd., First 

Pakistan Securities Limited and Al-Hoqani Securities, have also played an active role in 

this affair. They have been found to be assisting the Group in actively manipulating the 

market. These houses, despite having knowledge that major shareholders, and insiders of 

the company were involved in trading of CTTL shares acted on their behalf and assisted 

them in: 

o Engaging in a series of transactions that are reported on a public display facility to give 

the impression of activity or price movement in the security; 

o Transactions in which there is no change in beneficial ownership of the security; 

i.e.wash sales ; 

o Transactions where both buy and sell orders are entered at the same time, with the 

same price and quantity by different but colluding parties; 

o Increasing the bid for a security to increase its price; i.e buying on uptick thus 

manipulating the price; 

o Buying at increasingly higher prices, and then selling in the market (often to retail 

customers) at the higher prices (pumping and dumping). 

o Assisiting in avoiding disclosure requirements under Sec 4 of the Listed Companies 

(Substantial Acquisitions of voting shares and takeovers) Ord, 2002 by splitting 

purchase of one member of Group into two members of Group; 

o Arranging financing for the Group for further acquisition of the Company’s shares, 

These brokerage houses were also found violating various rules and regulations namely 

Brokers and Agents Registration Rules, 2001, KATS Regulations, General Rules & 

Regulations, etc. 

During the course of the investigation, Al-Hoqani Securities informed us that its client Irfan 

Mehmood, brother of the CFO of CTTL, the most active player of the Group, received 30.8 

April 10, 2007 4

million shares of CTTL in his sub account without any apparent consideration, during the 

period December 7, 2005 to December 7, 2006. Details of these transactions are as follows: 

Incoming deliveries Date Quantity 

Muhammad Siddiq Suleman Dec 7, 2005 to May 17, 2006 3,754,718 

Yuba Jamil CDC Inv A/c Oct 10, 2006 1,900,000 

Muhammad Ajmal Ansari Oct 17, 2006 435,000 

Ahmed Jamil Ansari CDC Inv A/c Nov 8, 2006 11,500,000 

Irfan Mehmood CDC Inv A/c Dec 31, 2005 to June 12, 2006 10,652,685 

First Dawood Inv Bank Jan 26, 2006 936,175 

Shahid Ali Habib Sec June 12, 2006 300,000 

Total 29,478,578 

Following are some instances of the outgoing deliveries of CTTL from Imran Mehmood’s A/c: 

Outgoing deliveries Date Quantity 

Sold in the market Jan 1, 2006 to June 30, 2006: 4,887,500 shares 

July 1, 2006 to Dec 8, 2006: 8,997,350 shares 

13,864,850 

Shahid Ali Habib SEC June 12, 2006 to Dec 5, 2006 1,600,000 

Muhammad Ajmal Ansari June 13, 2006 to Nov 10, 2006 2,275,000 

First Pakistan Securities Nov 16, 2006 2,000,000 

Irfan Mehmood Dec 7, 2006 350,000 

First Dawood Inv Bank June 13, 2006 1,225,000 

Trust Leasing Nov 28, 2006 1,640,420 

Naveed Bukhari (FCSC) Nov 29 & Nov 30, 2006 2,000,000 

Anwar Sheikh Dec 31, 2005 to June 14, 2006 320,000 

Total 25,275,270 

Like wise Orix Investment Bank (OIB) at one instance, when buying for its client Asim 

Fayyaz Qureshi exceeded the threshold of 10% of outstanding capital of CTTL, divided the 

buying of 5,844,500 shares between two of its clients, Mr. Ajmal Ansari, CEO of CTTL, and 

Mr. Asim Fayyaz Qureshi, to avoid disclosure under Listed Companies (Substantial 

Acquisitions of voting shares and takeovers) Ord, 2002 and the Companies Ordinance 

1984. 

April 10, 2007 5

Based on our review of the data and records, we have prima facie evidence that potential 

violation of various laws, rules, regulations and guidelines, including but not limited to the 

following, took place: 

i) Insider Trading 

• Securities and Exchange Ordinance 1969, Section 15A- Prohibition on stock 

exchange deals by insiders 

• Listed companies (Prohibition of Insiders Trading Guidelines, Guideline), Clause 

3-Prohibition on dealing, communicating or counseling by insiders 

ii) Price Manipulation, wash trades, market manipulation 

• Securities and Exchange Ordinance 1969, S-17(e) Prohibition of fraudulent acts, etc. 

iii) Substantial acquisition of shares in excess of 10%, and 25% without disclosure 

• Listed Companies (Substantial Acquisitions of voting shares and takeovers) Ord, 

2002 

iv) Companies Ordinance 1984 – S-222 Submission of statements of beneficial owners of 

listed securities, and S-224 Trading by directors, officers and principal shareholders. 

v) Broker acted in collusion with the clients to manipulate the market and the price of 

CTTL shares and were an active party to insider trading being perpetuated by CEO 

& CFO of CTTL. 

• Brokers and Agents Registration Rules, 2001- R-12 Brokers to abide by code 

of conduct which specifically states that they shall not violate any law of the 

land. 

vi) KSE Regulations with respect to short selling under ready market 2002, KATS 

Regulations and General Rules & Regulations of KSE 

Please refer to Annexure 11 for relevant text of the various laws identified above. 

April 10, 2007 6

2. CORPORATE INFORMATION OF THE COMPNAY INCLUDING LIST OF BOARD 

OF DIRECTORS 

List of Directors and officials of the Company as at June 30, 2005 is given below: 

Name of Directors 

Mr. Ahmad Jamil Ansari 

Mr. Mohammad Ajmal Ansari 

Yuba Jamil Ansari 

Maria Jamil Ansari 

Abu Shamim Muhammad Ariff 

Hasan Jamil Ansari 

NB: Shareholding of CTTL is given in Annexure 5. 

Chief Executive 


Chief Accountant 

Mr. Imran Mehmood 

Secretary 

S.M. Mehbob 

Legal Advisor 

Ahmed Adnan & Qazi Associates 

List of Directors and officials of the Company as at January 5, 2007 is given below: 





M. Imran Mehmood 

General (Rtd.) Safdar Ali Khan 

M. Tariq Rangoonwala 

Mr. Nadeem Ahmed 

April 10, 2007 7

3. EVENTS LEADING TO INITIATION OF ENQUIRY 

3.1 An unusual trading pattern was observed in Callmate Telips Telecommunication 

3.2 

Price (Rupees) 

Limited (CTTL) during the month of November, 2006 and in the first week of 

December 2006 when unprecedented volumes in the scrip along with upper price caps 

followed by lower price caps were frequently witnessed usually within few minutes of 

start of trading. A graphical representation of this activity is provided below. 

120.00 

100.00 

80.00 

60.00 

40.00 

20.00 

0.00 

Callmate Telips - Price & Volume 

1-Nov 

2-Nov 

3-Nov 

6-Nov 

7-Nov 

8-Nov 

10-Nov 

13-Nov 

14-Nov 

15-Nov 

16-Nov 

17-Nov 

20-Nov 

21-Nov 

22-Nov 

23-Nov 

24-Nov 

27-Nov 

28-Nov 

29-Nov 

30-Nov 

1-Dec 

4-Dec 

5-Dec 

6-Dec 

7-Dec 

8-Dec 

Volume Price 

For trading sessions during November 1, 2006 and December 8, 2006, the scrip hit the 

upper circuit breaker 14 times including in 11 consecutive 

sessions during the period 

November 17, 2006 to December 4, 2006. The scrip price increased from Rs. 49.35 on 

November 01, 2006 to Rs. 101.95 by close of trading on December 04, 2006, i.e. 106.6% 

increase in share price during the period. It was also observed that the average daily 

volume increased to 4.68 million shares during November 01 to December 04, 2006 as 

compared to average daily volume of 2.24 million shares for the month of October 

2006. Annexure 1 contains price and volume trends during the period under review. 

April 10, 2007 8 

17.50 

15.75 

14.00 

12.25 

10.50 

8.75 

7.00 

5.25 

3.50 

1.75 

0.00 

hares in millions) 

lume (S 

Vo

3.3 Review of 

the trading data of top 20 volume leader Members in the scrip for the period 

November 7, 2006 to December 8, 2006 also shows, that significant volumes of the scrip 

were concentrated among few brokerage houses namely First National Equities 

Limited, Orix Investment Bank (Pak) Ltd, Al-Hoqani Sec. & Inv. Cor. (Pvt) Ltd & 

Shahid Ali Habib Securities (Pvt) Ltd, comprising 72% of the buy side volume of 

market during the period under review. Similarly Orix Investment Bank (Pak) Ltd, Al- 

Hoqani Sec. & Inv. Cor. (Pvt) Ltd, First National Equities Limited First Capital Equities 

Limited comprise 62% of the sale side volume of market. Please see Annexure 2 for 

details of the top 20 buyer Members and 

Seller Members. 

3.4 An abnormal situation was also observed in the CFS market during the period under 

review. The CFS volume in CTTL shares as on November 14, 2006 stood at 4.63 million 

shares valued at Rs. 0.25 billion, however, leveraging in CTTL shares reached its peak 

on December 06, 2006 when it touched 37.99 million in CTTL shares with underlying 

value of Rs. 3.49 billion. Please see Annexure 3 for CFS figures during the period under 

review. 

3.5 The CFS position as at December 8, 2006 was also concentrated among few brokerage 

houses as financees. For instance, First National Equities Ltd (Quantity 12.66m shares 

and Rs.1.1b), Orix Investment Bank (Quantity 7.1m shares and Rs.0.58b), Shahid Ali 

Habib Securities (Quantity 6.6m shares and Rs.0.67b) and Motiwala Securities 

(Quantity 3.9m shares and Rs.0.39b) accounted for 89% of total market. Please see 

Annexure 4 for top 10 Financiers and Financees.A Graph given below provides date 

wise CFS volume and value as under: 

April 10, 2007 9

Volume - Mln Shares 

3.5 

3.6 

40.00 

35.00 

30.00 

25.00 

20.00 

15.00 

10.00 

5.00 

0.00 

14-Nov-06 

15-Nov-06 

16-Nov-06 

17-Nov-06 

20-Nov-06 

21-Nov-06 

CTTL-CFS Value & Volume 

November 14 - December 08, 2006 

22-Nov-06 

23-Nov-06 

24-Nov-06 

27-Nov-06 

28-Nov-06 

29-Nov-06 

30-Nov-06 

1-Dec-06 

CFS Volume CFS Value 

The un-audited financial statements of CTTL for the year ended June 30, 2006 revealed 

that it had a paid up capital of 65,366,330 shares. The company vide its letter dated 

August 9, 2006 to the Karachi Stock Exchange declared the free float of the company to 

be 41,417,272 shares i.e. 63.36% of its outstanding capital. The CFS financing figures 

were therefore significantly unusual as this show that 91% of the free float was 

financed through CFS as on December 06, 2006. 

The total book entry shares of the company available in the Central Depository System 

on December 8, 2006 were 64,947,011 shares. While reviewing CTTL ownership status 

as at December 8, 2006, obtained from CDC, names of major shareholders i.e., sponsors, 

reported in the last published accounts were not found. This information gives rise to a 

doubt that perhaps sponsors have sold their shareholding or have refinanced the same 

in the CFS market or are being held by some other person(s). It may be noted that as 

per the printed audited accounts of the company for the year ended June 30, 2005 the 

Ansari family and their associates 

owned 55% of the share capital (please see Annexure 

5 for details) . According to the details available with us, the Ansari family together 

with a Group indulged in substantial buying and selling of CTTL shares and presently, 

the Ansari family and their close associates have directly or indirectly acquired voting 

shares 

of CTTL, individually or through group of persons acting in concert i.e. the 

Group, approximately 80.95% shares of CTTL (for details see para 3.8 below). Majority 

of this holding is either being refinanced in the CFS market or held by institutions 

against repo financing extended to the Ansari family and the Group. 

April 10, 2007 10 

4-Dec-06 

5-Dec-06 

6-Dec-06 

7-Dec -06 

8-Dec -06 

4.00 

3.50 

3.00 

2.50 

2.00 

1.50 

1.00 

0.50 

0.00 

Value - Rs. Billion.

3.7 Furthermore, as stated above, upper price locks were observe d on daily basi s as soon 

as the market opened. Bid/offer data during the period under review was examined 

for the pre-open trading and trading sessions. Review of pre-open trading sessions fo r 

the period under review shows that price of CTTL shares was influenced by a Group 

of 

persons, as identified in this report. For instance, M r. Naved Haider Bukhar i put 16 

orders each amounting to 200,000 

shares at upper circuit breaker level in pre-open 

session on December 4, 2006 aggregating to 3.20 millio n shares ( i.e. 7.7% of free 

float of 

CTTL shares). Prima facie, the purpose of putting such bulk ord ers was to lock th e 

market on a higher lock level. Like wise, same Grou p of persons w ere found involve d 

in creating selling pressure in the market; for instance Mr. Naveed H aider Bukhari on 

Dec 8, 2006 placed 10 bulk quantities 

orders each amounting to 25, 000 shares 

aggregating 2.25 million shares 

(5.4% of free float of CTTL shares). The purpose of 

putting such bulk orders was to lock the market on a lowe r level circuit breaker. Please 

refer Annexure 9 for more details and instanc es where price of the scrip 

was influenced 

by the identified Group by putting orders in bulk quantities at upper 

and lower locks 

on various trading days. 

3.8 Based on our investigation, beneficial interest of Ansari Fami ly and the Group of 

associate persons (Group), CTTL stock as at D ecember 8 , 2006 as reported in CDC, is as 

follows: 

Client Name 

Shares in Shares 

CFS CDS 

Shares Under 

Repo 

Arrangement 

Total 

Interest 

Ansari Family & Group of associated persons - - - 

Ahmad Jamil Ansari – Chairman CTTL 206,709 - 206,709 0.32 

Mohammad Ajaml Ansari-Chief Executive CTTL 4,377,100 66,500 - 4,443,600 6.79 

Hasan Jamil Ansari-Director CTTL - - - 

Yu ba Jamil Ansari- Director CTTL - - - 

Maria Jamil Ansari- Director CTTL - - - 

Nuzhat Ikramullah - - - 

Abu Shamim M. Arif - - - 

Interglobe Commerce Pakistan Pvt Ltd. 

First Pakistan Securities (Trading from various KSE 

- - - 

Brokers for Irfan Mehmood; brother of CFO CTTL) 4,818,500 - 450,000 5,268,500 8.06 

Irfan Mehmood, brother of CFO CTTL 

M. Ashraf Khan, who has named CFO CTTL as his 

1,500,000 3,097,191 9,331,801 13,928,992 21.31 

nominee in account opening form 3,524,900 2,360,500 3,845,000 9,730,400 14.88 

Asim Fayyaz Qureshi 5,828,400 618,100 6,446,500 9.86 

Nadeem Ahmad Khan, legal advisor of CTTL 1,055,800 60,100 - 1,115,900 1.70 

April 10, 2007 11 

%

Naveed Haider Bukhari 6,331,600 - - 6,331,600 9.69 

Muhammad Hasan 3,665,000 3,665,000 5.60 

Kamran Mehmood (Brother of CFO of CTTL) - - 2,400,000 2,400,000 3.67 

Sub total 1 27,436,300 

Other major shareholders 

10,074,100 16,026,801 52,917,201 80.95 

Junaid Habib 1,500,000 1,500,000 2.29 

Muhammad Aqeel 3,900,000 3,900,000 5.96 

Sub total 2 5,400,000 - 5,400,000 11.14 

TOTAL 32,836,300 10,074,100 16,026,801 58,937,201 90.16 

Total Share capital as at June 30, 2006 was 65,366,330 shares 

3.9 During the review period there were strong rumors in the market that an offshore 

Saudi investor is making a bid to acquire CTTL shares. Please see Annexure 7 for 

Market Research Reports for relevant references. Additionally, there was some 

reported conflict between the statutory auditors of the company M/s A.F. Ferguson 

and the management over qualifications in the audit report on the financial statements 

for the year ended June 30, 2006. Furthermore, the company without following through 

with the legal requirements declared bonus and cash dividend on Dec 1, 2006. Senior 

officials of the company knew about these developments and were hence insiders as 

they had access to the unpublished price sensitive information. 

3.10 All above facts coupled with market rumors that major shareholders and management 

of CTTL were actively involved in trading in CTTL shares provided reasonable ground 

to SECP for initiating a probe into the trading of CTTL shares for the period November 

7, 2006 to December 8, 2006. 

April 10, 2007 12

4. METHODOLOGY ADOPTED TO CONDUCT INVESTIGATE THE AFFAIRS OF CTTL 

4.1 For purposes of this inquiry, following data was used: 

• Ready and CFS market trading data from the Karachi Stock Exchange, including 

bids and offer data. 

• CDS data from Central Depository Company of Pakistan Ltd including beneficial 

ownership statements, and account activity reports. 

• Back office records from Brokerage houses including account opening forms and 

NIC copies of each entity and evidence of receipt and payment instruments. 

• Universal Identification Number database that provides a map for each investor, on 

a national level, irrespective of the exchange or the brokerage houses from which 

the investor trades. 

4.2 Using UIN database, investors having significant turnover during the period under 

review were identified. It became apparent that significant volumes were concentrated 

amongst few Persons/Investors. First Pakistan Securities Limited (acting on account of 

Irfan Mehmood), Irfan Mehmood and Muhammad Ajmal Ansari comprised 62% of the 

total buyers in the market during the period under review. Similarly Irfan Mehmood, 

Muhammad Ajmal Ansari, Asim Fayyaz Qureshi and First Pakistan Securities Ltd 

comprised 51% of the total market sale activity. Please see Annexure 7 for top 20 

buyers and seller clients during the period under review. 

4.3 Furthermore, bid/ order data during the period under review was examined for the 

pre-open trading and trading sessions. Review of pre-open trading sessions for the 

period under review shows that price of the CTTL was influenced by the Group. For 

instance, Mr. Naved Haider Bukhari put 16 orders each amounting to 200,000 shares at 

upper circuit breaker level in pre-open session on December 4, 2006 aggregating to 3.20 

million shares (i.e. 7.7% of free float of CTTL shares). Prima facie, the purpose of 

putting such bulk orders was to lock the market on a higher lock level. 

4.4 Like wise, same Group of persons were found involved in creating selling pressure in 

the market; for instance Mr. Naveed Haider Bukhari on Dec 8, 2006 placed 10 bulk 

quantities orders each amounting to 25,000 shares aggregating 2.25 million shares (5.4% 

of free float of CTTL shares). The purpose of putting such bulk orders was to lock the 

market on a lower level circuit breaker. Please refer Annexure 9 for further details. 

April 10, 2007 13

5 DETAILED INVESTIGATION REPORT FOR EACH MAJOR PLAYER 

We identified various investors, including Officials of CTTL, and a number of brokers, who 

appeared to be involved in prohibited fraudulent trading activities including making 

fictitious quotations, creating false and misleading appearance of active trading activity in 

the scrip; in addition to other grave violations of laws and regulatory framework. Our 

findings have been Grouped as hereunder: 

5.1 Findings related to Individual Members of the Group 

5.2 Findings related to Brokers 

5.3 Findings related to KSE 

5.1 FINDINGS RELATED TO INDIVIDUAL MEMBERS OF THE GROUP 

A number of persons acting in concert were engaged in buying and selling of CTTL shares and 

were found to be a part of a Group centered around the MD and CFO of CTTL. This Group 

was involved in trading in the scrip, artificially generating turnover and hype in the market 

place, manipulating the price of the scrip so that it doubled in a period of one month. Member 

of this Group were also involved in manipulating the price of CTTL shares by putting 

unusually high bids and offers at its higher and lower circuit breaker limits during pre-open 

market sessions and during trading hours. 

Members of this Group are: 

1. Mr. Mohammad Ajmal Ansari (MAA), the CEO of CTTL, traded through OIB(OIB) 

2. Mr. Asim Fayyaz Qureshi (AFQ) traded through OIB and First National Equities Limited 

(FNEL). He was introduced to OIB by the CFO of CTTL. While reviewing Account opening 

form of AFQ with FNEL, we noted that AFQ has nominated Mr. Muhammad Ashraf Khan 

as his nominee. 

3. Mr. Muhammad Ashraf Khan (MAK) was introduced by the CFO of CTTL to OIB. While 

reviewing his account opening form with OIB, we noted that MAK has nominated the CFO 

of CTTL, Mr. Imran Mehmood as his nominee. This clearly shows that MAK is a front for 

the CFO of CTTL. MAK trades through OIB and FNEL. 

4. First Pakistan Securities Limited (FPSL) is a member of the Lahore Stock Exchange and is a 

major shareholder of FNEL, a member of KSE. FPSL trades through OIB and FNEL. While 

reviewing records received from FPSL it was noted that almost all the trading in CTTL has 

been done by FPSL on account of his client Irfan Mehmood. 

April 10, 2007 14

5. Naveed Haider Bukhari (NHB) trades through Shahid Ali Habib Securities Ltd, Noman 

Abid & Company and First Capital Equities Ltd. 

6. Irfan Mehmood (IM) is the brother of CFO of CTTL, Mr. Imran Mehmood. IM is a client of 

Al-Hoqani Securities. 

7. Hisar Ansari (HA) trades through Foundation Securities and based on the documents 

reviewed we believe that he is a front for Al-Hoqani Securities. On inquiry from the CEO of 

Al-Hoqani Securities we have been informed that HA has been trading on instructions of 

IM. 

8. Nadeem Ahmed Khan (NAK) is the legal advisor of CTTL. NAK trades through OIB. 

Evidence suggests that NAK was also using another person Mr. Tariq Jawed for trading in 

CTTL. 

9. Muhammad Hassan (MH) is a client of Moosa Noor Muhammad Shahzada & Co. 

however, payments on his behalf were made by IM. 

10. Mirza Usman Baig (MUB) is the client of Sherman Securities. In his account opening form 

he has nominated Mr. Kamran Mehmood S/o Syed Mehmood Ul Hasan and brother of 

CTTL CFO, as his nominee. 

April 10, 2007 15

We noted that during the period under review almost all the turnover of the market was concentrated among this Group. Summary of wash trades/ circular trades amongst the Group, for the period 

under review is given below: 

Date 

MAA NHB IM 

FPS A/c IM AFQ MAK NAK 

MH HA MUB Total Total 

Market 

Turnover 

Buy Sale Buy Sale Buy Sale Buy Sale Buy Sale Buy Sale Buy Sale Buy Sale Buy Sale Buy Sale Buy Sale Buy Sale 

7-Nov 0 0 0 0 

0 870,500 0 1,000 

0 0 830,700 0 455,900 0 0 0 0 0 1,286,600 871,500 6,640,900 19.37 

8-Nov 0 0 0 0 185,000 185,000 0 

0 0 0 532,300 1,000 0 0 0 0 0 0 717,300 186,000 2,826,900 25.37 

13-Nov 0 0 0 0 0 800,000 0 0 0 0 1,440,700 0 0 0 0 0 0 0 1,440,700 800,000 2,838,500 50.76 

14-Nov 0 0 0 0 854,100 77,000 0 0 0 0 0 0 0 0 0 0 0 0 100,000 35,000 954,100 112,000 2,450,900 38.93 

15-Nov 0 0 0 0 75,000 145,000 

0 0 0 0 0 0 0 0 0 0 0 0 0 15,000 75,000 160,000 2,624,600 2.86 

16-Nov 2,000,000 0 0 0 0 1,502,000 38,500 0 0 0 0 0 0 0 0 0 0 0 30,000 50,000 2,068,500 1,552,000 6,022,600 34.35 

17-Nov 1,575,200 0 0 0 400 2,730,000 5,395,500 88,400 0 0 0 0 0 0 0 0 0 0 483,900 513,900 7,455,000 3,332,300 12,585,300 59.24 

20-Nov 400 0 0 0 1,200 0 600 0 0 0 0 0 0 0 0 0 0 0 2,200 0 690,900 0.32 

21-Nov 0 0 0 0 224,100 0 700 0 0 0 0 0 0 0 0 0 0 0 224,800 0 586,100 38.36 

22-Nov 0 0 0 0 282,200 0 89,400 0 0 0 0 0 0 0 0 0 0 0 371,600 0 1,614,700 23.01 

23-Nov 404,000 0 0 0 191,800 0 169,000 100 0 0 0 0 0 0 0 0 0 0 764,800 100 1,996,800 38.30 

24-Nov 0 0 0 785,100 0 227,100 0 0 0 0 0 0 0 0 0 0 0 1,012,200 0 1,839,500 55.03 

27-Nov 0 2,000,000 0 0 1,000 0 0 0 2,000,000 0 0 0 0 0 0 0 0 0 2,001,000 2,000,000 2,890,300 69.23 

28-Nov 0 0 0 2,000,000 800,800 0 2,001,000 1,219,000 2,719,600 0 0 0 0 0 0 0 0 5,521,400 3,219,000 7,204,000 76.64 

29-Nov 0 0 0 0 500,000 0 0 25,000 7,294,300 0 0 0 160,000 0 0 0 0 250,000 0 6,500 7,954,300 281,500 10,518,600 75.62 

30-Nov 575,000 0 0 1,000,000 224,800 0 1,622,500 575,000 1,000,000 0 0 8,000 0 0 0 0 0 0 3,422,300 1,583,000 4,568,500 74.91 

1-Dec 2,078,300 0 574,500 0 3,489,200 0 1,165,500 25,000 3,000,400 0 0 3,000 0 0 0 0 0 1,276,300 10,307,900 1,304,300 15,376,600 67.04 

4-Dec 0 642,600 7,000,000 0 2,600,000 0 0 2,800,000 0 5,212,000 0 0 0 0 2,400,000 0 0 0 12,000,000 8,654,600 15,554,200 77.15 

5-Dec 0 4,496,800 500,000 0 0 1,000,000 25,000 600,000 0 1,450,800 0 0 0 0 0 0 0 0 525,000 7,547,600 8,769,500 5.99 

6-Dec 3,440,600 0 0 0 107,300 3,280,300 0 0 0 0 0 0 0 0 0 0 0 0 3,547,900 3,280,300 5,823,400 60.92 

7-Dec 0 0 0 0 0 18,100 0 1,200 0 0 0 0 0 0 0 0 - 

8-Dec 0 0 0 1,100 0 6,200 0 0 0 0 0 0 0 0 0 0 - 

Total 10,073,500 7,139,400 8,074,500 3,000,000 10,322,000 10,589,800 10,734,800 5,333,500 16,014,300 6,662,800 2,803,700 12,000 615,900 0 2,400,000 0 0 1,526,300 613,900 620,400 61,652,600 34,884,200 113,422,800 54.36 

MAA Mohammad Ajmal Ansari MAK Muhammad Ashraf Khan 

NHB Naveed Haider Bukhari NAK Nadeem Ahmed Khan 

IM Irfan Mahmood MH Mohammad Hasan 

FPS First Pakistan Securities Limited HA Hisar Ansari 

AFQ Asim Fayyaz Quershi MUB Mirza Usman Baig 

19,300 

7,300 

322,700 

75,600 

Group Activity 

as % to Total 

Market 

Given below is the diagram showing working of Group in terms of movement of cash and securities among them. Please note that most of the Group members opened their accounts with the 

brokerage houses over the past 2-3 months and traded solely in CTTL shares. 

April 10, 2007 16 16 

- 

- 

13.12 

6.58 

28.18 

4.57 

6.10 

25.77 

26.48 

- 

- 

- 

0.01 

- 

69.20 

44.68 

2.68 

34.65 

8.48 

55.64 

86.07 

56.33 

5.98 

9.66 

30.76

M. Ajmal Ansari 

Orix Inv. Bank 

First Nation Equity 

(FNE) 

First Pakistan Securities (trading on 

account of Irfan Mehmood) 

ORIX 

M. Ajmal Ansari 

Investor A/C 

OIB-ORIX 

M. Ashraf Khan 

(his nominee is CFO of CTTL) 

ORIX, FNE 

Asim Fayyaz Qureshi 

FNE, ORIX 

Neveed Haider Bukhari 

SAH, Noman Abid, FCE 

Tariq Javed 

ORIX 

* For onward credit of FPSL A/c maintained with FNE 

** CFS Financing provided by FNE to MAK 

*** CFS Financing provided by FNE to MAK 

**** In settlement of FPSL trades with FNE and on FPSL instructions 

WORKING OF THE GROUP 

Ahmed Jamil Ansari 

Investor A/C 

Hisar Ansar 

Foundation Sec. 

Yuba Jamil 

Investor A/C 

Irfan Mehmood 

(Brother of CFO - CTTL) 

Al-Hoqani Securities 

Nadeem Ahmed Khan 

All Sale proceeds 

Muhammad Hasan 

Moosa Noor M. Shahzada 


Cash paid for purchase of shares of shares cover all purchases 

(Hisar Ansari was selling shares on behalf of Irfan Mehmood) 

The transfer of money and shares between the different persons within the Group is clear indication that they are acting in concert. 

17

5.1.1 MOHAMMAD AJMAL ANSARI (MAA) - Group Member: 

MAA 

is the CEO of CTTL and is also a Director on the board of the company. MAA opened the account 

with 

OIB on November 08, 2006 and traded only in CTTL shares. The trading in his account started on 

November 

16, 2006. Total share position of MAA as at December 8, 2006 shows: 

Shares 

in Shares under Shares financed under Repo Total % age of total paid 

CDS CFS 

Arrangement 

Holding up capital 

66,946 4,377,100 0 4,444,046 6.79% 

5.1. 1.1 Trading Pattern in Ready Market 

During 

the period under review, trading pattern of MAA in Ready and CFS Market is as follows: 

Date 

16 Nov 2006 

Open CFS 

Position 

- 

17 Nov 2006 2,000,000 

20 Nov 2006 3,575,200 

21 Nov 2006 3,575,200 

22 Nov 2006 3,575,200 

Ready 

Buy 

Volume 

Ready Sale 

Volume 

22 Nov 2006 C to C 1,500,000 

23 Nov 2006 2,075,200 

24 Nov 2006 2,479,200 

27 Nov 2006 

479,200 

27 Nov 2006 C to C 1,885,000 

Avg. 

Price Buy Value Sale Value 

CFS 

Financee 

Qty. Open 

position 

Total 

Ready 

Market 

Volume 

2,000,000 - 56.40 112,799,593 - 2,000,000 6,022,600 

1,575,200 - 59.73 94,087,116 - 3,575,200 12,585,300 

400 - 62.80 25,120 - 3,575,200 690,900 

- 

- 

- 

- 

- - - 3,575,200 

- - - 2,075,200 

404,000 * - 72.60 29,330,400 - 2,479,200 1,996,800 

- - - - 479,200 

- 2,000,000 80.00 - 160,000,000 479,200 2,890,300 

29 Nov 2006 479,200 2,944,500** - - 3,423,700 10,518,600 

30 Nov 2006 3,423,700 

01 Dec 2006 3,998,700 

04 Dec 2006 6,077,000 

05 Dec 2006 5,433,000 

06 Dec 2006 

Total 

936,500 

Buy – Sale = 2,493,600 shares 

575,000 - 92.60 53,245,000 - 3,998,700 4,568,500 

2,078,300 - 97.02 201,633,450 - 6,077,000 15,376,600 

- 642,600 101.94 - 65,507,376 5,433,000 15,554,200 

- 4,496,800 97.79 - 439,732,239 936,500 8,769,500 

3,440,600 - 92.53 318,363,255 - 4,377,100 5,823,400 

13,018,000 10,524,400 809,483,934 665,239,615 

* NB1: On 23-11-06, the buy volume is 404,000, but recorded at 350,000 in the statement given by Orix. 

18

** NB 2: In this instance, AFQ bought 5,844,500 shares of CTTL from OIB 

on Nov 29, 2006. In order to 

avoid the disclosure as required under Listed Companies (Substantial Acquisition of voting shares and 

takeovers Ordinance, 2002), the buying of AFQ was broken between MAA (2,944,500 shares) and AFQ 

(2,900,000 shares). The Amount was recorded in MAA account but actually purchased by AFQ. 

The chronology of events is as follows: 

o On Nov 10, 2006 MAA transferred 2,000,000 Shares of CTTL from his inves tor account to his Sub- 

account m aintained with OIB. Then 2,000,000 shares were transferred to AFQ on Nov 25, 2006. 

The same shares were returned by AFQ 

to MAA on Nov 27, 2006. 

o On Oct 17, 2006 MAA transferred 435,000 shares of CTTL from his CDC Investor Account to the 

Sub account of IM maintained with Al-Hoqani Securities. It should be noted that IM transferred 

2,000,000 CTTL shares from his sub-account maintained with Al-Hoqani Securities to the 

Investor Account of 

MAA on Oct 11, 2006. 

o On No 

v 22, 2006 M AA sold 1,500,000 shares of CTTL to FNEL and other various 

clients at the 

rate o f Rs.69.15. FNEL was a major buyer in that 

C to C transaction and quantity bought 

amounted to 1,275,000 shares. Please refer to Annex ure 12 for details. 

o On No v 27, 2006 MAA Sold 2,000,000 shares of CTTL through explicit cross transaction at KATS 

in wh ich AFQ w as the counterparty. o On No v 24, 2006 MAA sold 1,885,000 shares of CTTL to FNEL, Bank of Khyber (BOK) and other 

variou s clients through C to C transacti ons at the r ate of Rs.76.20. BO K and FN EL were major 

buyer in that C to C transaction and quantity bought by them amo unted to 1, 000,000 shares and 

500,00 0 shares respectively. Please r efer Annexure 13 for details of F NEL C to C. 

o OIB o n the instruction of MAA pa id Rs.65m on Dec 5, 2006 to NHB. 

Conclusion: Bein g the CEO of CTTL MAA had ma terial inside ifnoramtion r egarding the possible 

a cquisition of CTT L shares 

by a foreign investor, the audit qualifications and the propose d issuance of 

cash and stock dividend. No disclosure of this trading position was made and profits made were not 

deposited with the company as required by law. Above mentioned trading by the client is prima facie a 

violation of Section 15A of Securities and Exchange Ordinance 1969, titled-“Prohibition on stock 

exchange deals by insiders”. 

19

Guideline 3 of Listed companies (Prohibition of Insiders Trading Guidelines, titled “Prohibition on 

dealing, 

communicating or counseling by insiders”. 

5.1.1.2 

Wash Trades and Circular Trades 

Wash trade constitute those 

improper transactions in which there is no genuine change in actual 

ownership of the security. Details of the instances 

where MAA was involved in wash trades and circular 

trades with other member of the Group are given hereunder: 

Buy/ 

Counter 

Date Sale Name Volume Counter Party Volume 

16-11-06 Buy Muhammad Ajmal Ansari 2,000,000Irfan Mehmood 1,502,000 

Mirza Usman Baig 50,000 


27-11-06 Sale Muhammad Ajmal Ansari 2,000,000Asim Fayyaz Qureshi 2,000,000 

04-12-06 Sale Muhammad Ajmal Ansari 642,600Irfan Mehmood 642,600 

05-12-06 Sale Muhammad Ajmal Ansari 4,496,800Naved Haider Bukhari 500,000 

First Pakistan Sec. 25,000 


Con clusion: It can be observed from above referred wash trades instances that members of the Group 

were trading 

among themselves. Above referred act whereby false and misleading appearance of trading 

activity in the scrip was created, is prima facie a violation of S-17 e of Securities 

and Exchange Ordinance 

1969. 

5.1.1.3 

Price Manipulation 

During 

the period under review MAA has been involved in active buying and selling of CTTL 

securities(Refer 

5.1.1.1), some times exceeding 69% of the total market turnover of the particular day 

(Refer Trading 

on Nov 27, 2006, Dec 5, 2006 and Dec 6, 2006). 

Instances were noted where MAA was seen to be manipulating the market upward 

by buying on uptick 

and 

selling on downtick on following trading sessions: 

Date Buy/Sell Freq Open High Low Close Volume 

20061117 Buy 29 59.05 59.85 59.05 59.85 1,575,200 

20061201 Buy 36 95.5 97.2 95 97.2 2,078,300 

20061205 Sell 66 101.6 101.6 96.9 96.9 4,496,800 

Please refer Annexure 10A for graphical presentation of buying/ selling on upticks or downticks for 

above referred activity. 

20

Conclusion: The trading practices adopted by MAA depicted in the charts above clearly establishes that 

MAA 

attempted to manipulate the price and is therefore in gross violation of S-17 e of Securities and 

Exchange Ordinance 1969. 

5.1.1.4 Non-compliance of Listed Companies (Substantial Acquisition 

of voting shares and 

takeovers) Ordinance, 2002 

As of December 8, 2006 MAA acting in concert w ith other members of Group acquired more than 80.95% 

of paid up capital of the company. Please see para 3.8. All this was done without 

the required disclosures 

and Public announ cement under Sec 4, 5 and 6 o f the Ordinance. We believe that the Ansari family 


CFO of CTTL were the main architects of this scheme and were acting in concert, and hence were 

in 

violation of the 

Takeover Ordinance. 

However, MAA individually acquired and disposed of substantial shareholding in CTT L shares, during 

the period under review. Movements in MAA holding (inclusive of CTC Transactions as provided by 

Orix Investment Bank) are given below: 

Shares bought Shares Sold Cumulative 

Quantity in Quantity in Quantity in As % age of 

Date 

million million million share capital 

Opening balance 2.0 

Nov 16, 2006 2.0 4.0 6.11 

Nov 17, 2006 1.57 5.57 8.52 

Nov 22, 2006 CTC 1.5 4.07 6.23 

Nov 23, 2006 0.40 4.47 6.84 

Nov 24, 2006 CTC 1.88 2.59 3.96 

Nov 27, 2006 2.0 0.59 0.9 

Nov 28, 2006 CTC 2.94 3.53 5.4 

Nov 30, 2006 0.57 4.1 6.27 

Dec 1, 2006 2.07 6.17 9.43 

Dec 4, 2006 0.64 5.53 8.46 

Dec 5, 2006 4.49 1.04 1.59 

Dec 6, 2006 3.44 4.4 6.7 

Hold ing as at Dec 8, 

2006 including 

CFS 

4. 4 6.7% 

Above trading a ctivity of M AA did not attract violation of se ction 4 of the Listed 

Companies (Substantial 

Acquisition of V oting Shares and Takeovers) Ordina nce, 2002, as the same did 

not reach 10% threshold 

which requires disclosure under the Ordinance. 

21

Conclusion: MAA acting in concert with other individual members of the Group violated the Listed 

Companies (Substantial Acquisition of voting shares and takeovers) Ordinance, 2002 

5.1.1.5 Change in beneficial 

ownership 

Section 

222 (c) of the Companies Ordinance 1984 provides that every director, chief executive, company 

secretary, auditors, managing agent, chief accountant and more than 10% shareholder of 

a listed 

company shall submit to the registrar and the Commission a return of beneficial ownership on Form-32 

for change in its shareholding, within 15 days of the change. 

It has been observed that MAA, CEO of CTTL has entered into various transactions during the period 

under review through OIB, and from other brokerage houses. Please see MAA cumulative position in 

CTTL shares in 5.1.1.4 above. Due to these transactions beneficial ownership of his shareholding in the 

CTTL 

changed but he has failed to file Form-32 for said changes in shareholding. 

Conclusion: MAA as CEO of CTTL was subject to this law, and has failed to file the required 

information as prescribed in the section 222 of the Companies Ordinance, 1984 

5.1.1.6 

Pre-open trading session activity 

No activity found. 

5.1.1.7 Pumping and dumping 

While reviewing the trading pattern of MAA it has been observed that MAA bought 

large quantities of 

CTTL shares at lower values and subsequently sold them at higher prices. Please refer table given in 

5.1.1.1. 

MAA also attempted to manipulate the prices as shown i n 5.1.1.3. 

Conclusion: Analysis of trading activities 

of Mr. Ansari points to the fact that attempts were made to 

push up the prices through heavy buying 

activity and then later when desired/favorable rates were 

achieved shares were sold to realize profits. 

The above referred trading activity by MAA is prima 

facie an offence under S-17 e of Securities and 

E xchange Ordinance 196 9. 

5.1.1.8 Non-compliance of Short Selling Regulations 

No instances were identified. 

22

5.1.1.9 Trading by Directors 

S-224 of the Companies Ordinance 1984 provides that, where any director, chief executive …. beneficial 

owner 

of more than ten percent….. make any gains by the purchase and sales, or the sale and 

purchase,…. with in a period of less than six months…. he shall make a report and tender the amount of 

such gain to the company and simultaneously send and intimation to this effect to the registrar and the 

Commission. We noted that no such report was made or gain was tendered by MAA. 

Conclusion: Above referred lapse on the part of MAA is a gross violation of S-224 of the Companies 

Ordinance, 1984. 

General Information: 

Details as per CNIC 

Name Muhammad Ajmal Ansari 

Father Name: Zil-ur-Rahman Ansari 

Birth date: Nov 5, 1950 

CNIC No. 42000-0677785-3 

Address: House No. B-19, 11 Central Street DHA Phase II, Post office, DHA, Karachi 

Family No. MV8Q3B 

Other information f rom account opening form and other records from brokerage house: 

UIN No. 42000-0677785-3 

OVERALL CONCLUSION: 

Based on the observations noted above it is evident that Mr. Muhammad Ajmal Ansari, prima facie 

acting in concert 

with other members of the Group, was involved in blatant insider trading. MAA was 

also prima facie found violating the securities law by manipulating the price of the scrip and indulged in 

wash sales. By indulging in above referred manipulative and prohibitive activities MAA has violated 

various law and regulations such as: 

• Securities and Exchange Ordinance 1969, Section 15A 

• Listed companies (Prohibition 

of Insiders Trading Guidelines), Clause 3 

• 

• 

5.1.2 

Securities and Exchange Ordinance 1969, S-17(e) (ii), (iii), (v) and (vi) 

Companies Ordinance 1984- S-222 (c) and S-224 

23

ASIM FAYYAZ QUERSHI (AFQ) - Group Member 

AFQ operated with OIB and FNEL.. AFQ opened the account with OIB on November 22, 2006, 

introduced by CFO of CTTL and started trading only in trading in CTTL shares from November 27, 2006. 

At FNEL, AFQ’s account was opened on Nov 11, 2006 on the reference of OIB. Total share position of 

AFQ as at December 8, 2006 includes: 

Shares in Shares under Shares placed under Repo Total % age of total paid 

CDS CFS Arrangement Holding up capital 

618,100 5,828,400 0 6,446,500 9.86% 

5.1.2.1 Trading Pattern in Ready Market 

During the period under 

review, trading position of AFQ in Ready Market is as follows: 

Open CFS Ready Buy Ready Sale Avg. 

CFS 

Financee Market 

Date Position Volume Volume Price Buy Value Sale Value Qty Volume 

27 Nov 2006 - 2,000,000 * - 80.00 160,000,000 - 2,000,000 2,890,300 

28 Nov 2006 2,000,000 2,719,600 - 84.00 228,446,400 - 4,098,000 7,204,000 

29 Nov 2006 4,098,000 7,294,300 2,944,500** 84.61 617,163,060 - 9,069,400 10,518,600 

30 Nov 2006 9,069,400 1,000,000 - 92.60 92,600,000 - 9,494,400 4,568,500 

01 Dec 2006 9,494,400 3,000,400 - 97.20 291,638,880 - 12,231,600 15,376,600 

04 Dec 2006 12,234,600 - 5,212,000 101.93 - 531,262,523 7,021,600 15,554,200 

05 Dec 2006 7,021,600 - 1,450,800 97.97 - 142,134,494 5,562,500 8,769,500 

07 Dec 2006 5,787,800 - 1,200 87.50 - 105,000 5,828,400 322,700 

Total 16,014,300 9,608,500 1,389,848,340 673,502,017 

Buy – Sale = 6,405,800 

* MAA was seller 

** As per the statement provided by OIB, on Nov 29, 2006 AFQ bought 5,844,500 shares of CTTL 

from OIB. In order to avoid the disclosure as required under Listed Companies (Substantial 

Acquisition of voting shares and takeovers Ordinance, 2002), the buying of AFQ was broken 

between Muhammad Ajmal Ansari (2,944,500 shares) and Asim Fayyaz Qureshi (2,900,000 

shares). 

Chronology of events are as follows: 

o MAA transferred 2,000,000 Shares of CTTL from his Sub-account maintained with OIB to AFQ on 

Nov 25, 2006. The same shares were returned by 

AFQ to MAA on Nov 27, 2006. 

24

o On Nov 27, 2006 AFQ bought 2,000,000 shares of CTTL through 

explicit cross transaction at KATS in 

o 

o 

which MAA was the counter party. 

On Dec 4, 2006 FNEL received a cheque issued by IM to be credited in the account of AFQ against a 

debit balance of Rs.80m. The cheque was subsequently dishonoured. 

On the instructions of AFQ, OIB paid Rs. 85 m to NHB on Dec 5, 2006. 

o Rs. 50 million was paid through cheque on Dec 6, 2006 

by Al-Hoqani Securities on behalf of his client 

o 

IM to OIB for its client AFQ . 

It was also noticed that during the period under review that AFQ, while trading with FNEL, did not 

pay a single rupee whereas his debit balance touched Rs.52m at one point in time. Similarly 

in case of 

AFQ’s trading through OIB, at only two instances receipt and payment instruments were exchanged. 

OIB issued a cheque for Rs.85m t o NHB, apparently on AFQ’s instructions, on Dec 5, 2006. In another 

instance, OIB receive d a cheque for R s.50m from Al-Hoqani Securiti es (on IM’s ) for the credit of 

AFQ accou nt on Dec 6, 

2006. 

Conclusion: Above referred trading pattern as well as instances where 

payments and deliveries were 

exchanged among the identifi ed perso ns, clearly shows that AF Q was an active member of th e Group. 

5.1.2.2 Wash Trades and Circular Trades [see comment 

s on MAA’s wash trades] 

Wash trade constitute 

those improper transactions in which there is no genuine change in actual 

ownership of the security. Details of instances where AFQ was involved in wash trades and circular 

trades with other member of the Group are given hereunder: 

Buy/ 

Counter 


27-11-06 Buy Asim Fayyaz Qureshi 2,000,000Muhammad Ajmal Ansari 2,000,000 

29-11-06 Buy Asim Fayyaz Qureshi 7,294,300Muhammad Hisar Ansari 250,000 

First Pakistan Sec. 25,000 

30-11-06 Buy Asim Fayyaz Qureshi 1,000,000Naved Haider Bukhari 1,000,000 

01-12-06 Buy Asim Fayyaz Qureshi 3,000,400Muhammad Hisar Ansari 1,276,300 

04-12-06 Sale Asim Fayyaz Qureshi 5,212,000Naved Haider Bukhari 5,212,000 

Conclusion: 

It can be observed from above referred wash trades instances that members of the Group 

were trading among themselves. Above referred act whereby false and misleading appearance of 

25

trading activity in the scrip was created, is tantamount to an offence under S-17 e of Securities and 

Exchange 

Ordinance 1969. 

5.1.2.3 Price Manipulation [See comments on MAA’s price manipulation] 

During the period under review AFQ has been involved in active buying 

and selling of CTTL shares 

(5.1. 2.1), some times exceeding 69% of the market turnover of the particular day (Refer Trading on Nov 

27, 29, and Dec 4, 2006). 

Additionally instances have been noted where various attempts were made by AFQ to influence the 

price during the trading sessions. 

Date Buy Freq Open High Low Close Volume 

20061129 Buy 58 80.05 88.2 80.05 88.2 7,294,300 

Please 

refer Annexure 10B for graphical presentation of buying/ selling on upticks or downticks for 

above 

referred activity. 

Conclusion: 

The trading practices adopted by AFQ depicted in the charts above clearly establishes that 

AFQ attempted to manipulate the prices and is therefore in gross violation of S-17 e of Securities and 



5.1.2.4 Non-compliance of Listed Companies (Substantial Acquisition of voting shares and 


We noted various instances during the period under review when AFQ’s interest in the CTTL shares 

exceeded 10%, without due disclosure, as required by the Listed Companies (Substantial 

Acquisition of 

voting shares and takeovers) Ordinance, 2002. For instance please refer table given in 5.1.2.1. Trading 

activity on Nov 29, 2006, Nov 30, 2006, Dec 1, 2006, and Dec 4, 2006 caused AFQ’s stake in CTTL amount 

to 13.84%, 14.52%, 18.71% and 10.74% respectively. 

Conclus ion: 

AFQ was in violation of the 

Takeover 

Ordinance. 

5.1.2. 5 Change 

in beneficial 

ownership 

Section 22 2 (c) o f the Companies Ordinanc e 1984 provides that every director, chief executive, 

company 

secretary, auditors, managing agent, chief accountant and more than 10% shareholder of a listed 



26

It has been observed that AFQ has entered into various buy and sell transactions substantially changing 

beneficial interest during the period under review, consequently required submission of required 

information to the Commission through Form-32. 

Conclusion: AFQ, as beneficial owner of more than 10% shareholding, failed to submit the required 


5.1.2.6 Pre-open trading session activity 

While reviewing pre-ope n session bids an d offers data, w e observed instances where AFQ manipulated 

the CTTL shares price by plac ing bulk quanti ty orde rs at upper level/lower level price lock, as 

applicable. 

A summary of Pre-open session analysis of bids/offers placed by AFQ is given below: 

Total 

Orders 

Qty 

Total 

Market 

Turnover 

Order 

entered as 

% to Total 

Market 

Member Buy/ Order No. of 

Queued 

Date Open Close code Sale Qty Lot orders 

Price 

29-Nov-06 84 88.2 77 Buy 200,000 10 2,000,000 79.8 10,518,600 19% 

30-Nov-06 88.2 92.6 175 Buy 200,000 5 1,000,000 92.6 4,568,500 22% 

1-Dec-06 92..60 97.2 175 Buy 200,000 8 1,600,000 97.2 15,376,600 10% 

Conclusion: Above instances tantamount to market manipulation and therefore is an offence under S- 

17(e) of Securities and Exchange Ordinance 1969. 


While reviewing the trading pattern of AFQ it has been observed that AFQ bought large quantities of 

CTTL shares at lower values then pumped up the price 

by buying at upticks and subsequently sold the 

shares 

at higher prices. Please refer table given in 5.1.2.1 which shows that bulk quantity of shares were 

bought on Nov 27 to Dec 1, 2006 at relatively lower prices whereas 

selling at higher prices was started 

from 

the period Dec 4 and onwards. 

Conclusion: The above mentioned analysis of trading activities of AFQ leads to a conclusion that in the 

first instance prices were hiked up through buying activity and then large quantities of stock were 

dumped when desired/favorable rates were attained. Substantial gains have been realized through such 

pumping and dumping trade practices. 

27

The above referred trading activities by AFQ tantamount to an offence under of S-17 e of Securities and 



Conclusion: No instance of non compliance found. 

5.1.2.10 Trading by Directors and major shareholder 


owner of more than ten percent….. make any gains by the purchase and sales, or the sale and 

purchase,…. with in a period of less than six months…. shall make a report and tender the amount of 

such gain to the company and simultaneously send and intimation to this effect to the registrar and 

the 

Commission. We noted 

that no such report was made or gain was tendered by AFQ. 

Conclusion: Above referred lapse on the part of AFQ is a gross violation of S-224 of the Companies 

Ordinance, 

1984. 

General Informati on: 

D etails as per CNIC: 

Name Asim Fayyaz Qureshi 

Father Name Fayyaz-uddin Qureshi 

Date of Birth Dec 12, 1970 

CNIC 

No. 42201-5948071-5 

Address 

House G-54/2 Clifton Quarters, Clifton, Jehangir Road 2, Karachi, Post office New Town, 

Karachi East 

Family No J79Y4P 

Other Information: 

UIN No: 42201-5948071-5 

OVERALL CONCLUSION 

Based 

on the observations noted above it is evident that AFQ acting in concert with other members of 

the Group, was involved in blatant insider trading. AFQ was also found violating the securities law by 

manipulating the price of the scrip and indulged in wash sales. By indulging in above referred 

manipulative and prohibitive activities AFQ has violated various law and regulations such as: 

• Securities and Exchange Ordinance 1969, 

Section 15A 

• 

Listed companies (Prohibition of Insiders Trading Guidelines), Clause 3 

28

• Securities and Exchange Ordinance 1969, S-17(e) (ii), (iii), (iv), (v) and (vi) 

• Listed Companies (Substantial Acquisitions of voting shares and takeovers) Ordinance, 2002-Section-4 

• 


29

5.1.3 NAVEED HAIDER BUKHARI (NHB) - Group Member: 

NHB was operating through three members, Shahid Ali Habib Securities, Noman Abid & Company and 

FCEL. 

NHB’s account with Noman Abid & Company was opened on December 01, 2006 while trading 

commenced only on December 04, 2006. NHB traded only in the shares of CTTL with Shahid Ali Habib 

Securities, Noman Abid & Company and FNEL during the period under review. NHB opened his 

account with FCEL on September 03, 2004. The account opening form for NHB with Shahid Ali Habib 

Securities under client code 0415 was not dated and contained annotations from the trader about 

commission rates being same as Junaid Habib (Client of Shahid Ali Habib Securities-Code 0414). This 

indicated the possibility of any link between two. The total shares position of NHB as at Dec 8, 2006: 

Shares in Shares Shares placed under 

% age of total paid 

CDS under CFS Repo Arrangement Total Holding up capital 

0 6,331,100 0 6,331,600 9.69% 

5.1.3.1 Trading pattern in Ready Market 

During the period under review, trading position of NHB in Ready Market is as follows: 

Open Buy Sale Avg. 


Date CFS Position Volume Volume Price Buy Value Sale Value Qty Volume 

28-Nov-2006 - - 2,000,000 84.00 - 168,000,000 - 7,204,000 

30 Nov 2006 - - 1,000,000 92.60 - 92,600,000 - 4,568,500 

01 Dec 2006 - 574,500 - 97.20 55,841,400 - 574,500 15,376,600 

04 Dec 2006 574,500 7,000,000 - 101.96 713,712,656 - 7,574,500 15,554,200 

05 Dec 2006 7,574,500 500,000 - 96.90 48,450,000 - 8,074,500* 8,769,500 

08 Dec 2006 6,574,500 - 1,100 83.15 - 91,465 6,331,600 75,600 

Total 8,074,000 3,001,100 818,004,056 260,691,465 

Buy – Sale = 5,072,900 

* On Dec 7, 2006 1,500,000 shares were released. 

Chronology of events are as follows: 

o NHB received 200,000 shares, 700,000 shares and 1,300,000 shares from IM (through IM’s sub- 

account maintained at Al-Hoqani Securities Ltd) on June 14, 2006, Nov 29, 2006 and Nov 30, 2006. 

o NHB paid Al-Hoqani Securities for credit of its client IM a sum of Rs. 25 million on December 04, 

2006. The cheque was dishonoured. 

o NHB received Rs. 65 million from MAA on December 05, 2006 (client of OIB) 

30

o NHB received Rs. 85 million from AFQ on December 05, 2006 (client of OIB) presumably to pay for 

NHB’s 

acquisition of 7.5m CTTL shares. 

o NHB paid cheque dated Dec 6, 2006 amounting Rs.80m to Shahid Ali Habib Securities Ltd. against 

his purchase of 7,574,500 shares of CTTL, vide Cheque number 485251 drawn on MCB Bank., 

however the cheque was dishonoured. 

o On Dec 7, 2006 Noman Abid Securities received a cheque amounting Rs.5m for credit to AFQ’s 

account. Issuer of the cheque was IM. 

Conclusion: NHB was an active member of the Group, identified earlier in this report, working with 

Ansari family and CFO of CTTL and therefore indirectly indulged in insider trading in CTTL shares. 

5.1.3.2 Wash Trades and Circular Trade s 

Wash 

trade constitute those improper transactions in which there is no genuine change in actual 

ownership of the security. Details of the instances 

where NHB was involved in wash trades and circular 

trades with other members of the Group are given hereunder: 

Buy/ 

Counter 

Date Sale 

Name Volum e Counter Party Volume 

30-11-06 Sale Naved Haider Bukhari 1,000,000Asim Fayyaz Qureshi 1, 000,000 

01-12-06 Buy Naved Haider Bukhari 574,000First Pakistan Securities 25,000 

04-12-06 Buy Naved Haider Bukhari 7,000,000Asim Fayyaz Qureshi 5,212,000 

Naved Haider Bukhari First Pakistan Sec. 1,788,000 

05-12-06 Buy Naved Haider Bukhari 500,000Ajmal Ansari 500,000 

Conclusion: It can be observed from above referred wash trades instances that NHB as a member of the 

Group indulged in wash sales, and creating false 

and misleading appearance of trading activity in the 

scrip, which is an offence under S-17 (e)(iii) of Securities and Exchange Ordinance 1969. 

5.1. 3.3 Price Manipulation 

During the period under review NHB has been involved in active buying and selling of CTTL shares 

(5.1.3.1), 

some times exceeding 45% of the market turnover of the particular day (Refer Trading on Dec 4, 

2006). 

Additionally 

an instance has been noted where an attempts was made by NHB to influence to price 

during the trading sessions by buying on uptick. 

31


2 0061204 Buy 70 99.55 102.05 99.55 102.05 7,000,000 

Please refer Annexure 10C for graphical presentation of buying/ selling on uptick for above referred 

activity. 

Conclusion: Trading practices adopted by NHB 

depicted in the chart above clearly establishes that NHB 

attempted to manipulate the prices which is an offence under S-17(e)(v) of Securities and Exchange 




We noted various instances during the period under 

review when NHB’s interest in CTTL shares 

exceeded 10% limit without due disclosure as required under the Listed Companies (Substantial 

Acquisition of voting shares and takeovers) Ordinance, 2002. For instance please refer table in 5.1.3.1 and 

corresponding trading days Dec 4, 5 and Dec 8, 2006 when NHB stake in CTTL amounted to 11.59%, 

11.59% and 12.17%. respectively. 

Conclusio n: NHB was in violation of Listed Companies (Substantial Acquisition 

of voting shares and 

t akeovers) Ordinance, 2002. 

5.1.3.5 Cha nge in beneficial ownership 

Section 

222 (c) of the Companies Ordinance 1984 provides that every director, chief executive, company 




It has been observed that NHB 

has entered into various transactions in CTTL share during the period 

under review, consequently obtaining interest in the scrip in excess of 10% which require submission of 

required information to the Commission through Form-32 However he failed to submit the required 


Conclusion: NHB has not filed the required information as prescribed in the aforesaid section. 

32

5.1.3. 6 Pre-open trading session activity While 

reviewing pre-open session bids and offers data, we observed instances where AFQ manipulated 

the CTTL shares price by placing bulk quantity orders at upper level/lower level price lock, as 

applicable. 

A summary of Pre-open session analysis of bids/offers placed by NHB is given below: 

Total 

Order 

entered as 

Member Buy/ Order No. of Total Queued Market % to Total 

Date Open Close code Sale Qty Lot orders Orders Qty Price Turnover Market 

4-Dec 97.2 101.95 105 Buy 200,000 16 3,200,000 102.5 15,554,000 21% 

8-Dec 87.5 83.15 105 Sell 250,000 10 22,500,000 83.15 75,600 29762% 

Conclusion: Above referred instances tantamount to market manipulation and therefore is an offence 

under S-17(e) of Securities and Exchange Ordinance 1969. 


No instances found. 



5.1.3.9 

Trading by Directors and major shareholder 

S-224 of the Companies Ordinance 1984 provides 

that, where any director, chief executive …. beneficial 

owner of more than ten percent….. make any gains by the purchase and sales, or the sale and 



Commission. We noted that no such report was made or gain was tendered by NHB. 

Conclusion: 

Above referred lapse on the part of NHB is a gross violation of S-224 of the Companies 



D etails as per the CNIC: 

Name Naveed Haider Bukhari 

Father Name Abbas Haider Bukhari 

Date 

of Birth August 14, 1971 

CNIC No. 42101-7070400-9 

33

Family No. N8J77X 

Address 2-A 4/7 Nazimabad 2, Karachi 


Based on the 

observations noted above it is evident that NHB acting in concert with other members of 

the group, was involved in blatant insider trading. NHB was also found violating the securities law by 

manipulating the price of the scrip 

and indulged 

in wash sales. 

By indu 

lging in above referred 

manipulat ive and prohibitive 

activiti 

es NHB 

has violated 

various 

law and regulations 

such 

as: 

• Securiti es and Exchange Ordinance 1969, Section 1 5A 

• 


• Securities and Exchange Ordinance 1969, S-17(e) (ii),(iii),(v) and (vi) 

• Listed Companies (Substantial Acquisitions of voting shares and takeovers) Ordinance, 2002-Section-4 

• 


34

5.1.4 MUHAMMAD ASHRAF KHAN (MAK) - Group Member: 

MAK has been operating with OIB and FNEL. He opened his account with OIB on October 03, 2006, on 

the 

recommendation of the CFO of CTTL, while the trading started on November 07, 2006. While 

analyzing the account opening form 

with OIB it was revealed that MAK has nominated Imran Mehmood 

as nominee, who is serving as CFO of CTTL. MAK opened his account with FNEL on October 17, 2006 

while the trading started only on November 13, 2006. 

The total shares position of MAK as at Dec 8, 2006 shows: 

Shares in Shares Shares placed under Total Holding % age of total paid 

CDS under CFS Repo Arrangement 

up capital 

2 ,366,800 3,524,900 3,845,000 9,736,700 

14.88% 

5.1. 4.1 Trading pattern in Ready Market 

During the period under review, the trading position of MAK in Ready market was as follows: 

Date 

Open CFS 

Position 

Buy 

Volume 

Sale 

Volume 

Avg. 

Price Buy Value 

Sale 

Value 


Qty Volume 

07 Nov 2006 - 830,700 - 54.78 45,453,337 - 829,700 6,640,900 

08 Nov 2006 829,700 532,300 1000 54.99 29,268,639 54,990 1,362,000 2,826,900 

13 Nov 2006 612,000 1,440,700 - 53.69 77,347,521 - 2,057,700 2,838,500 

07 Dec 2006 3,599,900 - 600 87.50 - 52,500 3,524,900 322,700 

Total 2,803,700 1,600 152,069,497 106,990 

Buy – Sale = 2,802,100 

While reviewing records received from OIB it was noted that MAK was involved in trading of CTTL 

shares earlier than the period under review, i.e. before November 7, 2006. With his OIB trading account, 

MAK bought 2,251,300 shares of CTTL during the period Oct 4, 2006 to Oct 10, 2006. Thereafter, FNEL 

made an arrangement with MAK whereby, financing against 2,000,000 CTTL shares at Rs.50/- was 

provided to MAK. Details are given hereunder: 

o On October 10, 2006 out of 2m shares, 942,000 shares were transferred to FNEL. On Oct 16, 

2006 OIB received Rs.47,145,000 against above shares from FNEL. 

o On October 18, 2006 out of 2m shares, 1,057,100 shares were transferred to FNEL. On Nov 

13, 2006 OIB received Rs. 52,855,000 against above shares. 

Conclusion: Above mentioned trading by MAK on behalf of Mr. Imran Mehmood, CFO of CTTL, is a 

violation of Section 15A of Securities and Exchange Ordinance 1969, titled-“Prohibition on stock 

exchange deals by insiders”. Being CFO of the company, Imran Mehmood was insider to the material 

35

information relating to possible acquisition by Saudi Group as well as the audit qualifications, and the 

attempted bonus issue and cash dividends. 

“Above mentioned trading activity is also the violation of Guideline 3 of Listed companies (Prohibition 

of Insiders Trading Guidelines, titled “Prohibition on dealing, communicating or counseling by 

insiders”. 

5.1.4.2 Wash Trades and Circular Trades 

Wash trade constitute those 

improper transactions in which there is no 

genuine change in actual 

ownership o f the security. Details 

of the instances where 

MAK was involved 

in wash trades and circular 

trades 

with other member of the Group are given hereunder which was designed to active trading in the 

scrip: 

Buy/ Counter 


07-11-06 Buy M. Ashraf Khan 830,700Irfan Mehmood 830,700 

08-11-06 Buy M. Ashraf Khan 532,300M. Ashraf Khan 1,000 

13-11-06 Buy M. Ashraf Khan 1,440, 700Irfan 

Mehmood 800,000 

Conclusion: It can be observed from above referred wash tra des instances that MAK as 

an active 

member of the Group was trading with other Group members. Above referred act whereby false and 

misleading appearance 

of trading activity in the scrip was created, is a violation of S-17 e of Securities 

and Exchange Ordinance 1969. 

5.1.4.3 Price Manipulation 

During the period we noted an instance where attempt was made by MAK to influence the price during 

the trading session. Following are details: 

Date Buy Frequency Open High 

Low Close Volume 

20061107 Buy 20 54 54.9 54 54.9 829,700 

Please refe r Annexure 10D for graphical presentation of buying/ selling on upticks or downticks for 


Conclusion: The trading practices adopted by MAK depicted in the chart above clearly establishes the 

fact 

that the MAK attempted to manipulate price of CTTL share which is an offence under S-17e of 

Securities and Exchange Ordinance 1969. 

36

5.1.4.4 Non-compliance of Listed Companies 

(Substantial Acquisition of voting shares and 


On December 8, 2006, MAK’s interest (i.e. 14.88%) in the CTTL shares exceeded 10%, without due 

disclosure, as required in the Listed Companies (Substantial Acquisition of voting shares and takeovers) 


Conclusion: 

MAK was therefore in violation of the Ordinance. 

5.1.4.5 Change in beneficial ownership 

Section 222 (c) of the Companies Ordinance 1984 provides that every director, chief executive, company 


company 

shall submit to the registrar and the Commission a return of beneficial ownership on Form-32 


I t has been observed that MAK has entered into a transaction during the period 

under review, thus 

exceeding the threshold that re quire submission of information to the Commission through Form-32 

However he failed to submit the required information as prescribed in the section 222 of the Companies 

Ordinance, 1984 

Conclusion: MAK as holder of 14.88% shareholding, has not filed the required information as prescribed 

in the aforesaid section and hence 

is in violation of the law. 


While reviewing pre-open session bids and offers data, we observed an instance where MAK 

manipulated the CTTL shares price by placing bulk quantity orders 

at lower level price lock. A summary 

of Pre-ope n sessio n analysis is given below: Total Total 

Order 

entered as 

Member Buy/ Order No. of Orders Queued Market % to Total 

Date Open Close code Sale Qty Lot orders Qty Price Turnover Market 

7-Dec 92.1 87.5 175 Sale 250,000 6 1,500,000 87.5 322,700 465% 

Conclusion: Above instances tantamount to market manipulation and therefore is an offence under S- 

17e 

of Securities and Exchange Ordinance 1969. 

37


No instances of violation were found. 

5.1.4.8 Trading by Directors and major shareholder 

S-224 of the Companies 

Ordinance 1984 provides that, where any director, chief executive …. beneficial 

owner 

of more than ten percent….. make any gains by the purchase and sales, or the sale and 


such 

gain to the company and simultaneously send and intimation to this effect to the registrar and the 

Commission. We noted that no such report was made or gain was tendered by MAK. 

Conclusion: Above referred lapse on the part of MAK is a gross violation of S-224 of the Companies 



D etails as per the CNIC: 

Name 

Muhammad Ashraf Khan 

Father Name Muhammad Anwar Khan 

Date of Birth March 19, 1970 

CNIC No. 42201-9092086-7 

Family No. J5476M 

Address House 

No. 710/43, Jamshed Road, Fatima Jinnah Colony, Karachi 

Details as per the Account opening form: 

Nominee details as per the Account opening form of OIB (CNIC is also available with the A/c Opening 

form): 

Nominee Name Imran Mehmood 

Father Name Syed Mehmood Ul Hasan 

Date of Birth Oct 4, 1973 

CNIC 42000-04200195-3 

Family No O7G0N5 

Address A-1, ST -19A, Block 16, Gulistan-e-Johar, Karachi 


Based on the observations noted above it is evident that Mr. Muhammad 

Ashraf Kha 

n, acting in concert 

with other members of the group, was involved in blatant insider 

trading. 

MAK 

was also 

found 

violating the securities law by manipulating the price of the scrip and indulged in wash sales. By 

indulging in above referred manipulative and prohibitive activities MAK has violated various law and 

regulations such as: 


• 


38

• Securities and Exchange Ordinance 1969, S-17(e) (iii),(v) and (vi) 

• Listed Companies (Substantial Acquisitions 

of voting shares and takeovers) Ordinance, 2002-Section-4 

• 


39

5.1.5 IRFAN MEHMOOD (IM) - Group Member: 

IM, client of Al-Hoqani Securities opened his account with the member in November 2006. While 

examining the account opening forms, it was found that 

Irfan Mehmood is the brother of Imran 

Mehmood (CFO Callmate Telips). IM traded only in the shares of CTTL. 

The total shares position of IM in his own name and in name of FPS as at Dec 8, 2006 includes: 



Client CDS under CFS Repo Arrangement Total Holding up capital 

IM 3,100,932 1,500,000 9,331,801 13,932,733 21.31% 

FPS 0 4,818,500 450,000 5,268,500 8.06% 

Total 3,100,932 6,318,500 9,781,801 19,201,233 29.37% 

Please note that 13.40 million shares were transferred to IM by Ansari Family. 

Above holding represents the shares which were transferred by the Ansari family and Group to IM CDC 

A/c’s. FPSL which is the member of Lahore stock Exchange, operates through OIB and FNEL. FPSL 

informed that it was trading solely on behalf of its client, IM. It should be noted that FPSL is a related 

party of FNEL. 


During the period under review, the trading position of IM in the ready market was as follows (IM’s 

position through FPSL is not included below): 

Open 

CFS Buy Sale Buy/ Sale 


Date Position Volume Volume Avg. Price Buy Value Sale Value Qty. Volume 

07 Nov 2006 - - 870,500 53.38 - 46,467,155 - 6,640,900 

08 Nov 2006 

- 

185,000 185,000 

54.85/ 

54.03 

10,147,527 9,996,113 - 2,826,900 

13 Nov 2006 - - 800,000 52.86 - 42,313,808 - 2,838,500 

14 Nov 2006 

- 

854,100 77,000 

54.96/ 

54.34 

46,942,496 4,184,419 - 2,450,900 

15 Nov 2006 

- 

75,000 145,000 

54.97/ 

56.04 

4,122,955 8,126,070 - 2,624,600 

16 Nov 2006 - - 1,502,000 56.62 - 85,039,268 - 6,022,600 

17 Nov 2006 

- 

400 2,730,000 

58.00/ 

57.99 

23,200 158,324,833 - 12,585,300 

20 Nov 2006 - 1,200 - 62.80 75,360 - - 690,900 

21 Nov 2006 - 224,100 - 65.90 14,768,190 - - 586,100 

22 Nov 2006 - 282,200 - 69.15 19,514,130 - - 1,614,700 

23 Nov 2006 - 191,800 - 72.60 13,924,680 - - 1,996,800 

24 Nov 2006 - 785,100 - 76.20 59,824,620 - - 1,839,500 

27 Nov 2006 - 1,000 - 80.00 80,000 - - 2,890,300 

40

28 Nov 2006 - 800,800 - 84.00 67,267,200 - - 7,204,000 

29 Nov 2006 - 500,000 - 81.41 40,704,255 - - 10,518,600 

30 Nov 2006 - 224,800 - 92.60 20,816,480 - - 4,568,500 

01 Dec 2006 - 3,489,200 - 94.79 330,756,096 - - 15,376,600 

04 Dec 2006 - 2,600,000 - 101.88 264,886,081 - 1,500,000 15,554,200 

05 Dec 2006 1,500,000 - 1,000,000 96.90 - 96,903,030 1,500,000 8,769,500 

06 Dec 2006 1,500,000 107,300 3,280,300 

92.43/ 

9,917,203 305,034,351 1,500,000 5,823,400 

92.99 

Total 10,322,000 10,589,800 903,770,473 756,389,047 

Buy – Sale = (267,800) 

Given below is the table containing trading of IM done throug h his own ID as well as by 

using 

proprietary account 

of FPSL: 

Open CFS Buy Sale Cumulative Financee Market 

Date Position Volume Volume Balance Buy Value Sale Value Qty Volume 

7-Nov-06 - 0 870,500 (870,500) - 46,467,155 - 6,640,900 

8-Nov-06 - 185,000 185,000 (870,500) 10,147,527 9,996,113 - 2,826,900 

13-Nov-06 - 0 800,000 (1,670,500) - 42,313,808 - 2,838,500 

14-Nov-06 - 854,100 77,000 (893,400) 46,942,496 4,184,419 - 2,450,900 

15-Nov-06 - 75,000 145,000 (963,400) 4,122,955 8,126,070 - 2,624,600 

16-Nov-06 - 0 1,502,000 (2,465,400) - 85,039,268 - 6,022,600 

17-Nov-06 - 5,345,900 2,730,000 150,500 318,824,646 158,324,833 - 12,585,300 

20-Nov-06 5,395,500 1,800 0 152,300 75,360 - - 690,900 

21-Nov-06 5,396,100 224,800 0 377,100 14,768,190 - 5,396,800 586,100 

22-Nov-06 5,396,800 371,600 0 748,700 25,696,140 - 5,396,200 1,614,700 

23-Nov-06 5,486, 200 191, 800 0 940,500 13,924,680 - 5,486,200 1, 996,800 

24-Nov-06 5,48 6,200 899,400 0 1,839,900 68,534,280 - 5,456,600 1,839,500 

27-Nov-06 5,456,600 1,000 0 1,840,900 80 ,000 - 5,456,500 2,890,300 

28-Nov-06 5,456,500 2,800,800 1, 200,000 3,441,700 235,267, 200 100,800,000 6,226,500 7,204,000 

29-Nov-06 6,226,500 500,000 0 3,941,700 40,704,255 - 6,226,500 10,518,600 

30-Nov-06 6,226,500 1,847,300 575,000 5,214,000 171,059,980 53,245,000 7,224,000 4,568,500 

1-Dec-06 7,224,000 4,654,700 0 9,868,70 0 444,042, 696 - 8,389,500 15,376,600 

4-Dec-06 8,389,500 2,600,000 2,800,000 9,668,700 264,886,081 285,740,000 6,893,500 15,554,200 

5-Dec-06 6,893,500 0 1, 600,000 8,068,700 - 155,213,030 6,093,500 8,769,500 

6-Dec-06 6,093,500 107,300 3,280,300 4,895,700 9,917,203 - 6,318,500 5,823,400 

7-Dec-06 4,818,500 0 0 4,895,700 - - 6,318,500 322,700 

8-Dec-06 4,81 8,500 0 0 4,895,700 - - 6,31 8,500 75,600 

Total 20,676,700 15,781,0 00 1,669,073,239 949,449,69 6 

41

o During investigation we were inf ormed by Al-Hoqani Securities that it s c lient IM, during 

the 

period December 7, 2005 to December 7, 2006 received 30.8 million shares of CTTL in his 

sub 

account, fro m various accou nts, including following: Incoming deliveries Date 

Quantity 

Muhammad Siddiq Suleman Dec 7, 2005 to May 17, 2006 3,754,718 

Yuba Jamil CDC Inv A/c Oct 10, 2006 1,900, 000 

Mohd. Ajmal Ansari Oct 17, 2006 435,000 

Ahmed Jamil Ansari CDC Inv A/c Nov 8, 2006 11,500,000 

Irfan Mehmood CDC Inv A/c Dec 31, 2005 to June 12, 2006 10,652,685 

First Dawood Inv Bank Jan 26, 2006 936,175 

Shahid Ali Habib Sec June 12, 2006 300,0 00 

Following are some instanc es of the outgoing delive ries of CTTL f rom Imran Mehmood’ s A/c: 

Outgoing deliveries Date Quantity Sold in the market 

Various dates 

Jan 1, 2006 to Jun 30 , 2006: 

4,887,500 

July 1, 2006 to Dec 8, 2006:8,977,350 

13, 864,850 

Shahid Ali Habib SEC June 12, 2006 to Dec 5, 2006 1,600,000 Mohd. Ajmal Ansari June 13, 2006 to Nov 10, 2006 2,275,000 First Pakistan Securities Nov 16, 2006 2,000,000 Irfan Mehmood Dec 7, 2006 350,000 

First Dawood 

Inv Bank June 13, 2006 1,225,000 Trust Leasing Nov 28, 2006 1,640,420 

Naveed Bukh ari (FCSC) Nov 29 & Nov 30, 2006 2,000,000 

Anwar Sheikh Dec 31, 2005 to June 14, 2006 

320,000 

o IM t ransferred 0.7 million CT TL shares on November 

29, 2006 to NHB and 1.3 million shares 

again on November 30, 2006 through CDS. 

o NHB made a p ayment of Rs. 25m to Al-Hoqani Securities on IM’s behalf. On De c 4, 2006. 

The 

cheque was dishonoured subsequently. 

o On Dec 4, 2006 IM issued cheque of Rs.80m to FNEL for credit into account of AFQ. The cheque 

was dishonoured. 

42

o On December 4, 2006 Muhammad Hasan (MH), client of Mossa Noor Muhammad Shehzada & 

Co. Securities (MNMS) bought 2,400,000 shares of CTTL. Against these purchases IM paid 

cheques amounting to Rs.205,640,418 to the MNMS on Dec 7, 2006, however the cheques were 

dishonored. Details of the cheques 

are as under: 

Date Cheque No Amount Drawn on Payer Payee 

Dec 7, 2006 7706229 Rs.100,000,000 Standard Chartered, Khi Irfan Mehmood MNMS 


D ec 7, 2006 7706231 Rs.50,000,000 Standard Chartered, Khi Irfan Mehmood MNMS 

D ec 7, 2006 7706232 Rs.5,640,418 Standard Chartered, Khi Irfan Mehmood MNMS 

o On Dec 5, 2006 IM iss ued cheque ofRs.80m to FNEL for credit of FPSL. The cheque 

was 

dishonoured. 

o On Dec 6, 2006 Al-Hoqani Securities paid Rs. 50m on behalf of his client IM to OIB for its client 

AFQ. 

o Nadeem Ahmed Khan, client of OIB, and legal adviser of CTTL , transferred 227,500 shares 

of 

CTTL to IM on December 07, 2006 through 

CDS. 

Conclu sion: Above mentioned trading by IM, who is a brother of CFO of CTTL clearly indicates 

that 

CFO of the company and the Ansari Family was involved in trading of CCTL shares. Being CFO of the 

CTTL; he was insider to the material information relating to possible acquisition by foreign investor, 

bonus issue and cash dividend. The above trading activity by IM also attracts violat ion of S 15A of 

Securities and Exchange Ordinance 1969, title d-“Prohibition on stock exchange deals b y insiders” . 

Furthermore, he seems to be a front for th e Ansari family as 13m shares were transferred to his 

Account for no apparent consideration, prior to the start of the operation to acquire shares. 

Above 

mentioned trading activity is also the violation of Guideline 3 of Listed companies (Prohibition 

of Insiders Trading Guidelines, titled “Prohibition 

on dealing, communicating or counseling by 

insiders”. 

43


Wash trade 

constitute those improper transactions in which there is no genuine change in actual 

ownership 

of the security. Details of instances where IM was involved in wash trades and circular trades 

with other 

members of the Group are given hereunder:. 

Buy/ Counter 


07-11-06 Sale Irfan Mehmood 

870,500 M. Ashraf Khan 830,700 

08-11-06 Buy Irfan Mehmood 

185,000 Irfan Mehmood 185,000 


800,000 M. Ashraf Khan 800,000 

14-11-06 Buy Irfan Mehmood 854,1 00 Irfan Mehmood 77,000 


1,502,000 Muhammad Ajmal Ansari 1,502,000 

17-11-06 Sale Irfan Mehmood 2,730,000 Muhammad Ajmal Ansari 1,575,200 

First Pakistan Securities 1,154,800 

Irfan Mehmood 400 

04-12-06 Buy Irfan Mehmood 2,600,000 Muhammad Ajmal Ansari 642,600 

First Pakistan Securities 1,012,000 

06-12-06 Sale Irfan Mehmood 3,280,300 Muhammad Ajmal Ansari 3,280,300 

Conclusion: 

It can be observed from above referred wash trades instances that members of the Group 

were trading among themselves. Above referred act, whereby 

false and misleading appearance of 

trading 

activity in the scrip was created, is a violation of S-17e of Securities and Exchange Ordinance 

1969. 

5.1.5.3 


During the period under review instances were noted 

where various attempts were made by the IM to 

influence the price of the scrip during the trading session. On these days IM attempted to manipulate the 

price of the scrip 

by buying large quantities on uptick. 


20061201 Buy 130 88.1 97.2 88.1 97.2 500,000 

20061204 Buy 16 101.95 102.05 96 102.05 2,600,000 

20061206 Sell 16 92.45 94.1 92.1 92.1 3,280,300 

Please refer Annexure 10E for graphical presentation of buying/ selling on upticks or downticks for 


44

Conclusion: The trading practices adopted by IM depicted in the charts above clearly established that IM 

attempted to manipulate the prices and is therefore in gross violation of S-17e of Securities and Exchange 


5.1.5.4 Non-compliance of Listed Companies (Substantial Acquisition of voting shares 


takeove rs) Ordi nance, 

2002 

We noted various instances during the period under review when IM’s interest in the 

CTTL shares 

exceeded 10% and 25% without due disclosure and public announcement 

as identified in the Listed 

Companies (Substantial Acquisition of voting shares and takeovers) Ordin ance, 2002. 

Conclusion: Bas ed on above it is apparent that IM is in violation of the Ordinance. 5.1.5. 5 Change in beneficial ownership 

Section 222 (c) of the Companies Ordinance 1984 provides that every director, chief executive, 

company 




It 

has been observed that IM who held more than 10% shareholding in CTTL, entered into various 

transactions during the period 

under review, which requires disclosure and submission of required 

information to the Commission through Form-32. IM failed to submit the required information as 

prescribed in the section 222 of the Companies Ordinance, 1984. 

Conclusion: Based 

on above, it is established that IM violated S-222 of the Companies Ordinance 1984. 

5.1.5.6 Pre-open trading session activity While reviewing pre-open session bids and offers data, we observed instances 

where IM manipulated 

the CTTL shares price 

by placing bulk quantity orders at upper level/lower level price lock, as 

applicable. A summar y of Pre-open session analysis 

is given below: 

Total Total 

Order 

entered as 



21-Nov 62.8 65.9 110 Buy 250,000 12 3,000,000 65.9 586,100 512% 

23-Nov 69.15 72.6 110 Buy 300,000 8 2,400,000 72.6 1,996,800 120% 

45

24-Nov 72.6 76.2 110 Buy 250,000 8 2,000,000 76.2 1,839,500 109% 

27-Nov 76.2 80 110 Buy 300,000 10 3,000,000 80 2,890,300 104% 

28-Nov 80 84 110 Buy 250,000 13 3,250,000 84 7,204,000 45% 

29-Nov 84 88.2 110 Buy 250,000 1 250,000 88.2 10,518,600 2% 

30-Nov 88.2 92.6 110 Buy 200,000 10 2,000,000 92.6 4,568,500 44% 

1-Dec 92..60 97.2 110 Buy 200,000 10 2,000,000 97.2 15,376,600 13% 

4-Dec 97.2 101.95 110 Buy 200,000 7 1,400,000 102.5 15,554,200 9% 

Conclusion: Above instances tantamount to market manipulation of CCTL price and therefore attracts 

provisions of S-17e of Securities and Exchange Ordinance 1969. 


While reviewing the trading pattern of the IM, it has been observed that he bought 

bulk quantity of 

CTTL shares at lower 

rates and subsequently the shares were sold at higher rates. Please refer table 

5.1.5.1 

Conclusion: The above mentioned analysis of trading activities of IM leads to a conclusion that in the 

first instance prices hike up attempts were made through buying activity at upticks and then after when 

desired/favorable rates attained, such pumping and dumping trading practices 

were adopted to realize 

gains. 

The above referred trading activities by IM is tantamount to an offence under S-17 e of Securities and 

Exchange Ordinance 196 9. 

5.1.5.8 Violation of Blank Selling Regulations 

Conclusion: IM was gifted 13 million shares by the Ansari family and therefore subsequent sale of 

shares 

amounting to 2.4 million does not tantamount to blank sale. 

5.1.5.9 Trading by Directors and major shareholders 


owner of more than ten percent….. make any gains by the purchase 

and sales, or the sale and 



Commission. W e noted that no such report was made or gain was tendered by IM. 

46

Conclusion: Above referred lapse on th e part of IM is a gross vio lation of S-224 of 

the Companies 

Ordinanc e, 1984. 

General Information: Details as per the CNIC are given hereunder: 

Name Irfan Mehmood Father 

Name Syed Mehmood ul Hasan 


CNIC No. 42201-0315094-7 

Family No. L23P5C 

Address 

House No. A-1 (ST-19/A), Street Gulistan Jauhar Block 16, Karachi 

Details of the nominee from the account 

opening form of Al-Hoqani Securities are as follows: 

Name of nominee Kamran Mehmood (Cutting observed as initially Imran Mehmood’s name was 

entered) 

Father Name 

Syed Mehmood ul Hasan (No cutting observed) 

CNIC No. 42000-0420193-9 (Cutting observed as initially 42000-0420195-3 was written) 

Address 

19-A, ST A-1, Block 16, Gulistan-e-Jauhar, Karachi 

Tel Nil (cutting observed as initially 0300-8207795 was written) 

Conclusion 

Based on the observations noted above it is evident that Mr. Irfan Mehmood, acting in concert with other 

members 

of the group, was involved in blatant insider trading. IM was also found violating the 

securities 

law by manipulating the price of the scrip and indulged in wash sales. By indulging in above 

referred manipulative and prohibitive activities IM has violated various law and regulations such as: 

• Securities and Exchange Ordinance 

1969, Section 15A 

• 


• Securities and Exchange Ordinance 1969, S-17(e) (ii),(iii),(iv),v) and (vi) 

• Listed Companies (Substantial Acquisitions of voting shares and takeovers) Ordinance, 2002-Section-4 and 

• 

Section-5 


47

5.1.6 HISAR ANSARI (HA) - Group Member: 

HA is a client of Foundation Securities and is a trader at Al-Hoqani Securities. HA has instructed 

Foundation 

Securities in writing to transfer all securities purchased and sales proceeds realized to Al- 

Hoqani Securities. It seems 

that HA is being used as a dummy by Al-Hoqani Securities for trading with 

another member of the stock exchange and to hide the trail of the actual beneficial owner. This practice 

has been prohibited through a directive of 

the Commission to members of all exchanges. Further, all the 

payments to Foundation 

Securities 

were made through cheque by Al-Hoqani Securities. The total shares 

position of H A as at Dec 8, 2006 includes: 

Shares in Shares Shares placed under % age of total paid 


0 0 0 0 0 

5.1.6.1 Tradin g pattern 

in Ready Market 

During the period under review HA has following trading pattern: 

Open. 

Buy Sell Average Average Average Financee 

Date Position 

CFS Volume Volume price Buy Sell Qty 

Market 

Volume 

%age of 

market 

Volume 

29 Nov 2006 - 250,000 88.20 - 22,050,000 - 10,518,600 2.38 

01 Dec 2006 - 1,276,300 97.20 - 124,056,360 - 15,376,600 8.30 

Total - 1,526,300 - 146,106,360 

Buy – Sale = (1,526,300) 

o 

HA has instructed Foundation Securities in writing to transfer all securities purchased and sales 

proceeds realized to Al-Hoqani Securities. 

o All the payments to Foundation Securities were made through 

Securities. 

cheque drawn by Al-Hoqani 

Mr. Shahid Ali, CEO of Al Hoqani Securities was 

informed about the about referred evidences that 

support that HA was trading on account of proprietary trading of Al-Hoqani Securities. However, Mr. 

Shahid denied such charge and informed that HA was trading on the basis of instructions received 

from IM, a client of Al-Hoqani Securities and an active member of the Group. Subsequently on January 

16, 2007, the Al Hoqani Securities provided the following written statement: 

“This is to confirm you that our trader Mr. Muhammad Hisar Ansari have sold 1,250,000 shares of Callmate 

Telips Telecom through M/s Foundation Securities (Pvt) Limited on instruction of Mr. Irfan Mehmood on 

48

December 1, 2006. Please also note that proceeds from these sale have been transferred to Mr. Irfan Mehmood 

account maintained with us. “ 

Conclusion: Based on above it can be concluded that Hisar Ansari, with the knowledge and permission 

of Al-Hoqani Securities, was trading on behalf of Irfan Mehmood and assisting a Group of persons 

involved in insider trading. Al-Hoqani Securities and Foundation Securities knowingly allowed HA to 

open an account and trade in shares knowing full well that the beneficial owner was IM. 

5.1.6.2 

Wash Trades and Circular Trades 

Wash trade constitute those improper transactions in which there is no genuine change in actual 

ownership of the security. Details of instances where HI was involved in wash trades and circular trades 

with 

other members of the Group are given hereunder:. 

Date Buy/ 

Counter 

Sale Name Volume Counter Party 

Volume 

29-11-06 Sale Hisar Ansari 250,000Asim Fayyaz Qureshi 250,000 

01-12-06 Sale Hisar Ansari 1,276,300Asim Fayyaz Qureshi 1,276,300 

Conclusion: It can be obs erved f rom above referred w ash trade s instances that mem bers of the G roup 

were doing trading among themselves. Above r eferred act whereby false and misleading appearan ce of 

trading activity in the scrip was created, is a violation of S- 17e of Securities and Exchange Ordinance 1969. 

5.1.6.2 

Non-compliance of Listed Companies (Substantial Acquisition of voting shares and 



5.1.6.3 








49


5.1.6.7 Violation of Blank Selling Regulations 

Conclusion: HA sold 1.5 million shares at a time when he did not possess any beneficial interest in the 

shares. Prima facie evidence suggest that HA is in violation of Blank Selling Regulations and is guilty 

under section 17(e) of Securities & Exchange Ordinance 1969 


Details 

as per the CNIC are given hereunder: 

Name Muhammad Hisar Ansari 

Father Name Abdul Latif 


CNIC No. 42201-8853683-9 

Family No. L6D8GR 

Address House No. K-771, Area K, Korangi, Karachi 

Conclusion Based on the observations noted above it is evident that HA acting in concert with 

other members of the 

group, 

was involved in blatant insider trading. HI was also found violating the securities law by 

manipulating the price of the scrip and indulged in wash sales. By indulging in above referred 

manipulative and prohibitive activities HI has violated various law and regulations such as: 


• Listed 

companies (Prohibition of Insiders Trading Guidelines), Clause 3 

• Securities and Exchange Ordinance 1969, S-17(e) (iii) and (v) 

• Listed Companies (Substantial Acquisitions of voting shares 

and takeovers) Ordinance, 2002-Section-4 and 

• 

Section-5 


50

5.1.7 NADEEM AHMED KHAN (NAK) - Group Member: 

He 

is a part of the legal Firm Ahmed & Qazi Associates, which is the legal advisor of CTTL (Please refer 

published accounts for the year ended June 30, 2005 

as well as Accounts for the six month ended Dec 21, 

2005). NAK traded with OIB. and opened an account with OIB on November 21, 2005. 

The total shares position of NAK as at Dec 8, 2006 includes: 

Shares in Shares 

Shares placed under 

% age of total 

CDS under CFS Repo Arrangement 

Total Holding paid up capital 

60,100 1,055,800 0 

1,115,900 1.7% 


During the period under review trading position of NAK is given below: 

Open CFS 

Date Position 

Ready 

Buy 

Ready 

Sale 

Avg. 

Price Buy Value 

Sale 

Value 

Financee 

Qty 

7-Nov-06 - 455,900 - 54.9 25,028,910 - - 

10-Nov-06 - - - - - - 750,000 

13-Nov-06 750,000 - - - - - 750,000 

14-Nov-06 750,000 - - - - - 750,000 

15-Nov-06 750,000 - - - - - 750,000 

16-Nov-06 750,000 - - - - 

- 750,000 

17-Nov-06 750,000 - - - - - 750,000 

20-Nov-06 750,000 - - - - - 760,800 

21-Nov-06 760,800 - - - - 

- 760,800 

22-Nov-06 760,800 - - - - - 905,800 

23-Nov-06 905,800 

- - - - - 905,800 

24-Nov-06 905,800 - - - - - 905,800 

27-Nov-06 905,800 - - - - - 905,800 

28-Nov-06 905,800 - - - - - 905,800 

29-Nov-06 905,800 160,000 - 88.2 14,112,000 - 1,055,800 

30-Nov-06 1,055,800 - - - - - 1,055,800 

1-Dec-06 1,055,800 - - - - - 1,055,800 

4-Dec-06 1,055,800 - - - - - 1,055,800 

5-Dec-06 1,055,800 - - - - - 1,055,800 

6-Dec-06 1,055,800 - - - - - 1,055,800 

7-Dec-06 1,055,800 - - - - - 1,055,800 

8-Dec-06 1,055,800 - - - - - 1,055,800 

TOTAL 615,900 39,140,910 - 

Buy – Sale = 615,900 

51

o On December 4, 2006 through a Journal Voucher, entire ledger balance of Rs.7,888,419.16 CR at OIB. , 

o 

pertaining to Mr. Tariq Jawed (TJ) was transferred to NAK’s Account. Prima Facie evidence suggests 

that TJ was trading on account of NAK and therefore the credit balance to his account was 

transferred to the real owner of the shares. It should be noted that NAK is a lawyer 

of CTTL and is 

an insider being aware of the unpublished price sensitive information relating to possible Saudi 

takeover and audit qualifications. A written request from TJ was received wherein TJ instructed the 

Brokerage house to sell all CTTL shares in his account and transfer the entire sale proceeds to NAK’s 

Account. 

Furthermore while reviewing NAK’s account opening form appeared that he had designated Mr. 

Kabir Ahmed, as his nominee, and had identified Mr. Kabir as his colleague. Contact list given at the 

web site of Ahmed & Qazi Associates contain name of Mr. Kabir 

section. 

Ahmed under administration 

o NAK Transferred 227,500 shares of CTTL to IM on December 07, 2006 

through CDS without any 

apparent consideration. Conclusio n: Being legal advisor 

to the Company, NAK was insider to material information relating 

to possible acquisitio n by Saudi Group as well as the audit qualifications. The above 

trading activity by 

NAK also attracts violatio n of S 15A of Securities and Exchange Ordinanc e 1969 , titled-“ Prohibition 

on stock exchange deals 

by insiders”. 

“Above mentioned trading a ctivity is also a v iolation of Guidelin e 3 of Listed companies 

(Prohibition 

of Insiders Trading Guidelines, titled “Prohibition on dealing, communicating or counseling by 

insiders”. 

5.1.7.2 Was h Trades and Circular Trades No instance s were foun d. 

5.1.7.3 Pri ce Manipula tion 

No instanc es of violatio n were found. 

5.1.7.3 Non-complian ce of Listed Companies ( Substantial Acquisitio n of voting shares 


takeovers) Ordinan ce, 

2002 

No instances of non-compliance were found. 

52

5.1. 7.4 Change in beneficial ownership 

No instances of non-compliance were found. 

5.1. 7.5 Pre-open trading session activity 

No violations of trading in pre-open were found. 

5.1. 7.6 Pumping and dumping 

No trading practices 

which revealed pumping and dumping were found. 

5.1 .7 .7 Violations of Blank Selling Regulations 

No instances of violations were found. 


Details as per the CNIC are given hereunder: 

N ame Nadeem Ahmed Khan 

Fat her Name Abdul Raheem Khan 

Date 

of Birth Nov 2, 1962 

CNIC 

No. 31202-1137279-9 

Family 

No. 8K865C 

Present 

Address House No.404, Clifton Centre, Karachi 

Permanent 

Address House No. 100-A, Welcome Gate Colony, Bahawalpur 

Details of the nominee from the account opening 

form of OIB are as follows: 

Name 

of nominee Kabir Ahmed 

Father Name Quddos Khan 

CNIC 

No. 42401-1748528-3 

Address House No. 67, Street 3, Sector 3, Hub River Road, Haroon Bahria Complex, 

Karachi, Dakkhana Housing Society. 

Relatio n Colleague (Website of the 

law firm Ahmed & Qazi Associates indicate name of 

Mr. Kabir Ahmed as administration personnel of the firm) 

CONCLUSION 

Based on the observations noted 

above it is evident that NAK acting in concert with other members of 

the Group, was involved in blatant insider 

trading. By indulging in above referred prohibitive activities 

NAK 

has violated various law and regulations such as: 


• Listed companies (Prohibition of Insiders Trading Guidelines), Clause 3 

53

5.1.8 FIRST PAKISTAN SECURITIES Limited (FPSL) - Group Member: 

FPSL is a member of the Lahore Stock Exchange. 

It has been trading with FNEL and OIB. 

• The names of directors of FPSL are as follows: 

Mrs. Adeela Ali (w/o Mr. Ali Aslam Malik) 


Mr. Ali Raza Jaffery (S/o Muhammad Raza Jaffery) Director 

Ahmad Bilal Malik (s/o 

Malik Ijaz Ahmad) Director 

Rais Ahmed Dar (S/o Muhammad Allah Ditta) Director 

• Chattah Khan & Raza are the Legal Advisor, 

and Rahman Sarfraz & Co are Auditors of the 

Company 

It is pertinent to mention here that FNEL is an associate company of First Pakistan Securities Limited. It 

should be noted that presently those clients who 

are trading at KSE by placing their orders through the 

members of LSE and ISE, are not identified through 

UIN. Brokers of LSE and ISE use their own 

proprietary codes when trading on their own 

accounts, whereas in order to identify client trading, a 

suffix (/) is added with the proprietary code 

of broker. When the investigation was started against FPSL 

we were informe d the almost all the trading of FPS pertains to its client, IM. We were further informed 

by FPSL that throughout the period under review, IM has been trading substantial 

quantities of of CTTL 

shares without having received or made any payment to the brokerage house. 

The Brokerage house was 

requested 

to provide additional information to enable further investigation in the matter. However, 

based on the available information, it 

is prima facie apparent that IM was an undisclosed customer of 

FPSL and was trading through the FPS. IM opened his account at FPSL on Nov 16, 2006. Mr. Ali Malik 

informed us that OIB introduced IM to FNEL and FPSL and that they did not have any direct connection 

with IM. 

The total shares position 

of FPSL on account of IM as at Dec 8, 2006 is: 

Shares in Shares Shares placed under % age of total paid 


0 4,818,500 450,000 5,268,500 8% 


During the period under review trading position of FPSL A/c IM is given below: 

54

Open CFS Buy Sale Buy / Sale Financee Market 

Date Position Volume Volume Avg. Price Buy Value Sale Value Qty Volume 

07 Nov 2006 - - 1,000 52.25 - 52,250 - 6,640,900 

16 No v 2006 - 38,500 - 56.72 2,183,592 - 38,500 6,022,600 

17 No v 2006 38,500 5,395,500 88,400 59.09/58 .46 318,824,646 5,167,864 5,395,500 12,585,300 

20 Nov 2006 5,395,500 600 - 62.80 37,680 - 5,396,100 690,900 

21 Nov 20 06 5,396,100 700 - 65.90 46,130 - 5,396,800 586,100 

22 Nov 2006 5,396,800 89,400 - 69.15 6,182,010 - 5,486,200 1,614,700 

23 Nov 20 06 5,486,200 169,000 100 72.60/72.60 12,269,40 0 7,260 5,655,100 1,996,800 

24 Nov 2006 5,655,100 227,100 - 76.20 17,305,02 0 - 5,625,500 1,839,500 

28 Nov 2006 5,549,500 2,001,000 1,210,000 84.00/84.00 168,084,000 

101,640,000 6,330,500 7,204,000 

29 Nov 2006 6,330,500 - 25,000 88.15 - 2,203,750 6,315,500 10,518,600 

30 Nov 2006 6,315,500 1,622,500 575,000 92.60/92.60 150,243,500 53,245,000 7,953,000 4,568,500 

01 Dec 2006 7,953,000 1,165,500 25,000 97.20/97.20 113,286,600 2,430,000 9,068,500 15,376,600 

04 Dec 2006 9,06 8,500 - 2,800,000 102.05 - 285,740,000 5,768,500 15,554,200 

05 Dec 2006 5,768, 500 25,000 600,000 96.90/97.18 2,422,500 58,310,000 4,818,500 8,769,500 

07 Dec 2006 4,818,500 - 18,100 87.50 - 1,583,750 4,818,500 322,700 

08 Dec 2006 4,818,500 - 6,200 83.15 - 515,530 4,818,500 75,600 

Total 10,734,800 5,348,800 790,885,028 510,895,404 

Buy – Sale = 5,386,000 

Conclusion: It is evident that IM was trading on behalf of his brother Imran Mehmood, CFO of CTTL 

as he only started trading on Nov 17, 2006 and traded in CTTL exclusively. Essentially IM was fronting 

for Imran Mehmood who being CFO of the company, was insider to the material information relating to 

possible acquisition by Saudi Group, possible bonus and cash dividends as well as the audit 

qualifications. FPSL by allowing IM to trade and hiding his identity was aiding and abetting in 

committing the crime of insider trading, wash sales and price manipulation. 

The above trading activity by IM is a violation of S 15A of Securities and Exchange Ordinance 1969, 

titled-“Prohibition on stock exchange deals by insiders”. 

Above mentioned trading activity is also a violation of “Guideline 3 of Listed companies (Prohibition 

of Insiders Trading Guidelines” titled “Prohibition on dealing, communicating 

or counseling by insiders. 


Wash 

trade constitute those improper transactions in which there is no genuine change in actual 

ownership 

of the security. Details of instances where FPS A/c IM was involved in wash trades and 

circular trades with other Group members are 

given hereunder. 

55

Buy/ 

Counter 

Date Sale 

Name Volume Counter Party Volume 

17-11-06 Buy First Pakistan Securities 5,39 5,500 Irfan Mehmood 1,154, 

80 0 

First Pakistan Securities 88,400 

28-11-06 Buy First Pakistan Sec 2,001,000 First Pakistan Securities 1,219,000 

29-11-06 Sale First Pakistan Sec 25,000 Muhammad Ajmal Ansari 25,000 

30-11-06 Buy First Pakistan Sec 1,622,500 First Pakistan Securities 575,000 

Muhammad Ashraf Khan 8,000 

04-12-06 Sale First Pakistan Sec 2, 800, 000 Naved Haider Bukhari 1,788,000 

Irfan Mehmood 1, 012,000 

Further review of table 5 .1.8.1 shows instances where substantial quantities of shares were bought and 

on the same day were squared up at t he same rate. Refer Trading on Nov 28, 2006 and Nov 30, 2006. 

Conclusion: It can be observed from above referred wash trades instan ces that members of the Group 

were trading among themselves, thus projecting false and misleading appearance of trading activity 

in 

the scrip and is therefore 

a violation of S-17e of Securities and Exchange Ordinance 1969. 


During the period under review FPS A/c IM has been involved in active buying and selling of CTTL 

shares (5.1.8.1), some times exceeding 42% of the market turnover of the particular day (Refer Trading on 

Nov 17, 2006). 

Additionally an instance, mentioned below, has been noted where an attempt 

was made by FPS A/c IM 

to influence the price during the trading session. 

Date Buy Freq Open High Low Close 

Volume 

17 Nov 2006 Buy 126 57.75 59.85 57.2 59.85 5,395,500 

Please refer Annexure 10F for graphical presentation for above referred activity. 

Conclusion: 

The above referred trading activities by FPS A/c IM is a violation of S-17 e of Securities and 





We have noted that during the period under review, interest of FPS A/c IM, in CTTL shares exceeded 

the 10% 

threshold i.e. on Nov 28, 2006, disclosure as required in the Listed Companies (Substantial 

56

Acquisition of voting 

shares and takeovers) Ordinance, 2002 was not made. Furthermore on Nov 30, 

20 06 and Dec 1, 

2006 when FP S A/c IM had exposure o f 7,953,000 and 9,068, 500 shares 

representing 

12.17% and 13.87% holding respectively in the company, however no disclosures wer e made. 

5.1.8.5 

Change in beneficial ownership 

Sectio n 222 (c) of the Companies Ordinance 1984 provides that every director, chief executive, company 


company 

shall submit to the registrar and the Commission a return of beneficial ownership on Form-32 


It has been observed that FPS A/c IM has increased its shareholding beyond 10% on Nov 28, 2006, that 

remained above 10% till Dec 1, 2006. Such shareholding required submission of Form-32 to SECP. 

However, FPS A/c IM failed to submit required information as prescribed in the section 222 of the 

Companies Ordinance, 1984. 

Conclusion: However IM failed 

to submit the required information as prescribed in the section 222 of 

the Companies Ordinance, 1984. 


While 

reviewing pre-open session bids and offers data, we observed instances where FPS A/c IM 

manipulated the CTTL shares price by placing bulk quantity orders at upper level/lower level price 

lock, as applicable. An analysis of Pre-open session has revealed 

an abnormal trading behavior by FPS 

th at has been summarized below: Member Buy/ Order No. of 

Total 

Orders Queued 

Date Open Close code Sale Qty Lot orders Qty Price 

Total 

Market 

Turnover 

Order 

entered as 

% to Total 

Market 

24-Nov 72.6 76.2 175 Buy 300,000 8 2,400,000 76.2 1,839,500 130.47% 

Buy 300,000 7 2,100,000 

27-Nov 76.2 80 175 

100,000 1 100,000 80 2,890,300 76.12% 

Buy 200,000 9 1,800,000 

30-Nov 88.2 92.6 175 125,000 1 125,000 92.6 4,568,500 42.14% 

1-Dec 92..60 97.2 175 Bu y 200,000 7 1,400,000 97.2 15,376,600 9.10% 

Buy 100,000 3 300,000 

4-Dec 97.2 101.95 175 

200,000 8 1,600,000 102.05 15,554,000 12.22% 

7-Dec 92.1 87.5 175 Sale 200,000 10 2,000,000 87.5 322,700 619.77% 

57

Conclusion: Above instances tantamount to market manipulation by IM A/c FPS and is therefore a 

violation of S-17e of Securities and Exchange Ordinance, 1969. 


While reviewing the trading activity of FPS A/c IM, it has been observed that they bought bulk quantity 

of CTTL shares at lower values and subsequently the shares were sold at higher prices. Please refer table 

given in 5.1.8.1 which shows that bulk quantity of shares were bought on Nov 17 and Nov 28, 2006 at 

relatively lower prices whereas selling at higher prices was done on Nov 28 and Dec 4, 2006. 

Conclusion: The above mentioned analysis of trading activities of FPS A/c IM, is evident that in the first 

instance price was hiked up through huge buying activity and when desired/favorable rates were 

achieved shares in huge quantities were dumped and substantial gains have been realized. Classic 

pumping and dumping trading 

practice has been observed which is a violation of S-17 e of Securities 




No 

instances observed. 


FPS A/c IM is prima facie guilty of manipulative trade practices as explained above. Furthermore, it is 

evident that FPS used its own proprietary client code to hide Irfan Mehmood’s ID and thus could be 

accused of aiding and abetting 

manipulating the market in the pre-open session. 

IM in commission of the crime. FPS was actively involved in 

58

5.1.9 MIRZA USMAN BAIG (MUB) - Group Member: 

MUB is the client of Sherman Securities. In his account opening form, he has nominated Mr. Kamran 

Mehmood s/o Syed Mehmood ul Hassan, brother of CTTL CFO, 

as his nominee. The share position of 

MUB 

as on Dec 8, 2006 include: 

Shares in Shares under Shares placed under 

% age of total 

CDS CFS Repo Arrangement Total Holding paid up capital 

0 0 0 0 0 

5.9.1 Trading Pattern in Ready Market 

Date 

Open. 

Position CFS 

14 Nov 2006 

- 

Buy 

Volume 

Sale 

Volume 

100,000 35,000 

Buy/ 

Sale 

Avg. 

Price 

54.33/ 

55.91 

Avg. Buy 

Value 

Avg. Sale 

Value 

Financee 

Qty. 

Market 

Volume 

5,433,333 1,956,977 - 2,450,900 

15 Nov 2006 - - 15,000 56.10 - 841,500 - 2,624,600 

16 Nov 2006 

- 

30,000 50,000 

56.62/ 

56.22 

1,698,700 2,810,833 - 6,022,600 

17 Nov 2006 

- 

483,900 513,900 

57.65/ 

59.17 

27,898,161 30,409,356 - 12,585,300 

29 Nov 2006 31,500 - 6,500 80.10 - 520,650 - 10,518,600 

Total 

Buy – Sale = (6,500) 

613,900 620,400 35,030,194 36,539,316 

Conclusion: MUB by having trading connection with CFO of CTTL through his brother, is prima facie a 

possible Group member. 

5.9.2 Wash Trades and Circular Trades 

Counter UIN Counter 

Date Buyer UIN Name Volume (seller) Name Freq Volume % 

16- 4200006777853 Muhammad Ajmal 2000000 4220186473941 Mirza Usman Baig 3 50000 2.5 

17- 4220186473941 Mirza Usman Baig 483900 4220103150947 Irfan Mehmood 10 176500 36.47 

Conclusion: It can be observed from above referred wash trades instances that members of the Group 

were trading among themselves. Above referred act whereby false and misleading appearance of 

trading activity in the scrip was created, is a violation of S-17e(ii) of Securities and Exchange Ordinance 

1969. 



Name Mirza Usman Baig 

59

Father Name Mirza Asif Baig 


CNIC No. 42201-0315094-7 


Address House No. A-1 (ST-19/A), 

Street Gulistan Jauhar Block 16, Karachi 

Details of the nominee from 

the account opening 

form of Sherman 

Securities are as follows: 

Name of nominee 

Kamran 

Mehmood (Cutting observed 

as initially Imran 

Mehmood’s name 

was 

entered) 

Father 

Name Syed Mehmood ul Hasan (No cutting observed) 

CNIC No. 42000-0420193-9 (Cutting 

observed as initially 42000-0420195-3 was written) 

Address 19-A, ST A-1, Block 16, Gulistan-e-Jauhar, Karachi 

Tel Nil (cutting observed as initially 0300-8207795 

was written) 

Conclusion 

Based on the observations noted above it is evident that Mr. Irfan Mehmood, acting in concert with other 

members of the group, was involved in blatant insider trading 

and wash sales. By indulging in above 

referred prohibitive activities MUB has violated various law 

and regulations such as: 

• Securities and Exchange O rdinance 1969, Section 15A 

• Listed companies (Prohibition of Insiders Trading Guidelin es), Clause 

3 

• Securities and Exchange 

Ordinance 1969, S-17(e) (iii) 

60

5.1.10 Muhammad Hassan (MH) - Group Member: 

Muhammad Hassan is the client of Moosa, Noor Mohammed, Shahzada & Co. (Pvt.) Ltd. (MNMS). MH 

was not seen on the sell side and had no outstanding financing position by December 

08, 2006. Total 

share 

position of MH as at December 8, 2006 includes: 

Shares in Shares Shares placed under Repo % age of total paid 

CDS under CFS Arrangement Total Holding up capital 

3,665,000 0 0 3,665,000 5.6% 

5.1.1 6.1 T rading pattern 

in the Ready Market 

During 

the period under review, trading position of MH in Ready Market is as follows: 

Op en. CFS Buy Sale Avg. Avg. Buy Avg. Sale Financee Market 

Date Position Volume Volume Price Value Value Qty. Volume 

04 Dec 2006 - 2,400,000 - 102.04 244,889,296 - - 6,640,900 

Buy – Sale = 2,400,000 

On December 4, 2006 MH provided 900,000 shares of CTTL to the Moosa Noor Muhammad Shehzada 

& Co, as margin. CDC account activity shows that these shares were first moved from sub-account of 

M. Ashraf Khan to the CDC main account of FNEL and were subsequently transferred 

to MNMS 

account. On December 4, 2006 MH bought 2,400,000 shares of CTTL. Against these purchases, IM paid cheques 

amounting to Rs.205,640,418 to the Brokerage House on Dec 7, 2006, however the cheques were 

dishonored. Details of the cheques are as under: 

Date Cheque No Amount Drawn on Payer Payee 






UPWARD 

Date Buy Frequency Open High Low Close Volume 

04 Dec 2006 Buy 44 101.2 102.05 101.2 102 2,400,000 

61

Please refer Annexure 10G for graphical presentation for above referred activity. 

Conclusion: Above instances show that MH attempted to manipulate the market upward by buying 

on upticks and hence is in violation of S-17e of Securities 

and Exchange Ordinance 1969. 

5.1.16.3 Non-compliance of Listed Companies (Substantial Acquisition of voting shares 



Conclusion: 



Conclusion: No instances found. 

5.1.16.5 Pre- open trading session activity Conclusion: 




5.1.16.7 

Non-compliance of Short Selling Regulations 




Name 

Muhammad Hasan 

Father Nam e Muhammad Ali 

Date of Birth 1961 

C NIC No. 42301-8865871-1 Fa mily No. J8D0RF 

Address 

Parsa View, Flat No. X-306, Saddar Town, Main Clifton Road, Karachi 

Nominee person as per the account opening form of MNMS: 

Name 

of nominee Shamim Khan 

Husband Name Muhammad 

Hasan 

CNIC 42301-1769836-4 

Address Parsa View, Flat No. X-306, Saddar Town, Main Clifton Road, Karachi 

62

CONCLUSION 

Based on the observations noted above it is evident that MH, acting in concert with other members of the 

group, was involved in blatant insider trading. MH was also found violating the securities law 

manipulating the price of the scrip and indulging in wash sales. By indulging in above 

referred 

manipulative 

and prohibitive activities IM has violated various law and regulations such as: 


• 


• Securities and Exchange Ordinance 1969, S-17(e) (ii) and (iii) 

by 

63

5.2 FINDINGS RELATED TO BROKERS 

A broker holding a certificate of registration under the Brokers and Agents Registration Rules, 

2001 (“the Brokers Rules”) is required to abide by the code of conduct specified in these rules. 

Failure to abide by the code of conduct is a breach of Rule 12 of the Brokers Rules and may be 

penalized under Rule 8 thereof. 

Under the code of conduct, a broker is duty bound inter 

alia, to act with due skill, care and 

diligence in the conduct of all his business. Further, a broker is not expected to indulge in any 

act which is detrimental to investors’ interest or which leads to interference with smooth and 

fair functioning of the market. As a market participant, it is the obligation of the broker to 

protect the interest of investor and to ensure fair, efficient and transparent market. They are 

expected to maintain high standard of integrity, professionalism and fairness in the conduct of 

their business. 

During the course of investigation, we have noted that brokers identified in the preceding section 

of the report, have acted in collusion with the clients to manipulate the price, undertook market 

manipulations and moreover active party to insider trading being perpetuated by CEO & CFO 

of CTTL. These activities are the violation of R-12 of Brokers and Agents Registration Rules, 2001 

that prescribe the code of conduct for the brokers. 

You may also refer to the KATS regualtons here. It will then become easier to follow the 

subsequent sections. 

64

5.2.1 Orix Investment Bank Limited (OIB) 

You 

should state at the outset that OIB is a registered broker and therefore bound by the appropriate 

regulations. 

OIB played a major role, as the main hub for the insider trading and market manipulation 

activities 

by the Group. It has been found that during the period of Oct-November 2006 Mr. Ajmal 

Ansari, Asim Fayyaz Qureshi and Muhammad Ashraf Khan, key member of the Group, opened their 

account s with the OIB and started trading in the CTTL shares. 

This finding is supported by the evidence collected by the Commission as well as admitted by the key 

officials 

of the OIB in their meeting with SECP on December 11, 2006. The trading pattern of the 

brokerage house during the 

period under review is given hereunder: 

CFS CFS CFS 

CFS Open CFS Open Ready 

Release Release Close CFS Close 

Date Buy Sale Buy Ready Sale Buy Sale Buy Sale 

07-NOV-06 - 13,500 1,573,600 51,000 - 11,000 1,046,000 850,700 

08-NOV-06 850,700 1,048,500 571,300 183,000 21,000 163,900 676,700 538,800 

10-NOV-06 1,368,500 1,561,300 293,500 16,500 1,368,500 1,487,300 868,700 1,362,000 

13-NOV-06 1,362,000 942,700 6,000 12,000 - 199,400 774,200 6,000 

14-NOV-06 1,368,000 1,517,500 54,000 36,000 - 517,400 305,800 - 

15-NOV-06 1,368,000 1,305,900 42,500 14,500 - 333,800 529,900 - 

16-NOV-06 1,368,000 1,502,000 2,364,000 189,600 1,000 512,900 2,500,000 2,105,000 

17-NOV-06 3,472,000 3,489,100 1,832,200 767,500 100,000 546,300 2,910,000 1,834,200 

20-NOV-06 5,206,200 5,852,800 10,800 11,100 - - 478,900 10,800 

21-NOV-06 5,217,000 6,331,700 - - - 454,800 371,300 - 

22-NOV-06 5,217,000 6,248,200 54,600 - 1,500,000 1,872,300 1,275,300 172,600 

23-NOV-06 3,889,600 5,651,200 468,000 - 5,000 795,100 819,300 456,000 

24-NOV-06 4,340,600 5,675,400 58,000 - 2,003,000 1,548,100 576,400 132,000 

27-NOV-06 2,469,600 4,703,700 2,021,200 2,020,600 27,000 1,804,300 1,758,600 2,011,000 

28-NOV-06 4,453,600 4,658,000 

1,315,700 1,275,000 - 1,779,000 1,682,100 1,255,600 

29-NOV-06 5,709,200 4,561,100 6,090,400 437,700 100,200 707,900 1,256,700 6,026,500 

30-NOV-06 11,635,500 5,109,900 1,201,000 1,310,800 7,500 364,100 450,000 690,000 

01-DEC-06 12,318,000 5,195,800 2,182,900 3,352,000 385,700 128,000 140,800 2,078,300 

04-DEC-06 14,010,600 5,208,600 9,000 5,907,600 5,867,500 2,959,100 912,900 - 

05-DEC-06 8,143,100 3,162,400 - 4,546,800 4,498,500 1,530,800 1,600,000 - 

06-DEC-06 3,644,600 3,231,600 3,505,600 40,000 - 140,100 2,056,900 3,440,600 

07-DEC-06 7,085,200 5,148,400 - - - 173,100 - - 

08-DEC-06 7,085,200 4,975,300 - - - 10,000 - - 

23,654,300 20,171,700 

As per R-17(a) of the Karachi Automated Trading System (KATS) Regulations of the Karachi Stock 

Exchange (Guarantee) Limited, “a member shall be responsible for all orders entered from his trading 

65

workstation(s). Furthermore as per code of the conduct as prescribed in the Brokers Rules a broker shall 

not create a false market either singly or in concert with others or indulge in any act detrimental to the 

investor’s interest or which leads to interference with the fair and smooth functioning of the market. 

Keeping in view the trading pattern as well as the documents received from the brokerage house 

during the period under review it appears that: 

• Substantial trading in CTTL shares took place through OIB 

(refer trading days Nov 27 and Nov 

28, 2006) at the same rate that depict that false impression of active trading in the scrip i.e. wash 

sales. 

• An activity of Pumping and dumping was also being conducted 

through the brokerage house 

as the shares were being bought at lower prices and after creating artificial hype in the market, 

shares were being sold at substantially 

higher prices. 

• On Nov 29 , 2006 AFQ bought 

5,844,500 

shares from OIB . In order to avoid disclosure as 

required under Listed Companies (Substantial Acquisition of voting shares and takeovers) 

Ordinance, 2002, OIB colluded with the client such that the purchase of AF Q was broken 

between MAA (2,944,500 shares) and A FQ (2,900,000 shares). • Various instances were noted where OI B made payments to the client s and received payments 

from the clients of other brokerage house s directly, who were part of th e Group. 

• On Nov 27, 2006 two clients of Or ix Investment Bank. Mr. Muhammad Ajmal Ansari and Asim 

Fayyaz Qureshi sold and bought respective ly 2,00 0,000 shares of CTTL through explicit cross 

transaction at KATS that did not change the beneficial ownership a s transaction was done 

between colluding parties and thus the same tantamount to wash 

sales. 

• In a very unusual instance, a s admitted by the Brokerage Hou se in its written statement to the 

Commission, OIB on Dec 6, 2006 purchased 3,440, 600 shares from the ready market on account 

of Mr. Muhammad Ajmal Ansari, against a cheque received from Al-Hoqani Securit ies for the 

credit of Asim Fayyaz Qureshi. Record s received from Al- Hoqani Securities s how that 

this 

amount was given apparently on the instructions of Irfan Mehmood. 

• An instance has been observe d on November 10, 2006 when OIB sold 750,000 o f CTTL shares 

in 

CFS market on behalf of its client Mr. Nadeem Ahmed Khan, member of the Group, despite 

that fact that Mr. Khan had no position in the ready market on that day. This activity suggests 

that CFS market was used by Nadeem Ahmed in collusion with the broker for generation of 

cash thus defeating the total rationale of the CFS market and its regulations. 

66

• On December 5, 2006 a payment of Rs.65 million was made to Mr. Naveed Haider Bukhari 

(Group member) on the written instructions of Mr. Ajmal Ansari, even though Mr. Ajmal 

Ansari had only Rs. 46.8 million credit balance in his account with Orix Investment Bank. 

• On December 5, 2006 a payment of Rs.85 million was made to Mr. Naveed Haider Bukhari 

• 

• 

• 

(Group member) on the written instructions of Mr. Asim Fayyaz Qureshi, even though Mr. 

of cheque 

received from Hoquani Securities Ltd on the instructions of its client Irfan Mehmood 

Imran Mehmood, CFO of CTTL) in the name of OIB 

however the cheques were returned. 

December 4, 2006 75m 7706204 01617014501 

SCB Karachi 

SCB Karachi 

• On December 4, 2006 through a Journal Voucher, entire credit ledger balance 

of Rs.7,888,419.16 

• 

Asim F. Qureshi had only Rs. 6 million credit balance in his account with Orix Investment Bank. 

On December 6, 2006 OIB credited account of Mr. Asim Fayyaz Qureshi by Rs.50m on account 

(Brother of CFO of CTTL). 

We came across two instances where cheques were issued by Mr. Irfan Mehmood (Brother of 

Following are details: 

Cheque date Rs. Number Bank Account 

Bank Name 

December 9, 2006 100m 7706207 01617014501 

In case of a client, Mr. Muhammad Ashraf Khan, we observed number of instances where debit 

balance of the client range between Rs.57m-68m. 

pertaining to client (Mr. Tariq Jawed) was transferred to Mr. Nadeem Ahmed Khan’s Account. 

It prima facie suggests that Mr. Tariq Jawed was trading on account of Mr. Nadeem Ahmed 

Khan and on Dec 4, 2006 the profits and balances were transferred to the real owner. It should 

be noted that Mr. Nadeem Ahmed Khan is a lawyer of CTTL and is an insider being aware of 

the unpublished price sensitive information relating to possible Saudi 

takeover and audit 

qualifications. A written instruction from Tariq Jawed was received by OIB instructing the 

Brokerage house to sell all CTTL shares in Tariq Jawed account and to transfer the entire sale 

proceeds to Mr. Nadeem Ahmed Khan’s Account. 

We noted instances were bulk quantity of CTTL shares were transacted through Client to Client 

transactions. Following are two instances: 

67

o On Nov 22, 2006, OIB on a/c of Mr. Muhammad Ajmal Ansari, sold 1,500,000 shares of 

CTTL to FNEL and others at the closing rate of Rs.69.15. FNEL was a major buyer in that 

Cto C transaction and quantity bought amounted to 1,275,000 shares. Please 

see 

Annexure 12 

o On Nov 24, 2006, OIB on a/c of Mr. Muhammad Ajmal Ansari, sold 1,885,000 shares of 

CTTL to FNEL, Bank of Khyber and others at the closing rate of Rs.76.20. FNEL and BOK 

were major buyer in that Cto C transaction and quantity bought amounted to 500,000 

shares and 1,000,000 shares respectively. BOK subsequently sold these shares through 

OIBin ready market on Dec 1, 2006 at Rs. 97.2 per share. Please see Annexure 14 

• A client Mr. Ashraf Khan had nominated Mr. Imran Mehmood, an active member of Group and 

brother of Imran Mehmood, CFO. OIB, as admitted by its senior officials, was in knowledge of 

this relationship. 

An analysis of the pre-order session also revealed that bulk orders were entered through OIB in order 

to manipulate the share price, with a view to locking the price of the share at the upper circuit level. 

Following are instances: 

Order Buy/ Queued 

Date Time Client 

Order # Quantity Sale Price 

20061129 0944490003 AFQ 25173625 200,000.00 Buy 79.80 

20061129 0944500003 AFQ 25173639 200,000.00 Buy 79.80 

20061129 0944510007 AFQ 25173660 

200,000.00 Buy 79.80 

20061129 0944520001 AFQ 25173672 

200,000.00 Buy 79.80 

20061129 0944520023 AFQ 25173683 200,000.00 Buy 79.80 

20061129 0944530035 AFQ 25173706 200,000.00 Buy 79.80 

20061129 

0944540037 AFQ 25173726 200,000.00 Buy 79.80 

20061129 

0944450021 AFQ 25173568 200,000.00 Buy 79.80 

20061129 

0944470001 AFQ 25173589 200,000.00 Buy 79.80 

20061129 

0944480005 AFQ 25173608 200,000.00 Buy 79.80 

20061122 

0936170025 67 24490658 300,000.00 Buy 69.15 

20061122 

0936200009 67 24490685 300,000.00 Buy 69.15 

20061122 

0936220003 67 24490707 300,000.00 Buy 69.15 

20061122 

0936240009 67 24490728 100,000.00 Buy 69.15 

20061107 

0930000014 NL 23185409 50,000.00 Buy 54.90 

20061107 

0942080005 NL 23193069 50,000.00 Buy 54.90 

20061107 0942100007 NL 23193088 

50,000.00 Buy 54.90 

20061107 0942230015 NL 23193222 

50,000.00 Buy 54.60 

20061107 0942380005 NL 23193363 50,000.00 Buy 54.10 

68

Client code 67, AFQ and NL represent Abida Nasreen, Asim Fayyaz Qureshi and Nadeem Ahmed Khan 

respectively. 

The Managing Director of the Brokerage house Mr. Naeem Farooqui as well as Mr. Asif Hasan, COO, in 

their meeting with 

SECP, admitted that CFO of CTTL, Mr. Imran Mehmood approached MD Of the 

Brokerage house 

for opening of the CEO Mr. Ajmal Ansari’s Account along with some other persons 

account such as 

Mr. Muhammad Ashraf Khan and Mr. Asim Fayyaz Qureshi. The officials of the 

Brokerage house 

further informed that Mr. Asim Fayyaz Qureshi and Mr. Muhammad Ashraf Khan 

were also trading with First National Equities Limited. In addition they also informed that an another 

client, part of the Group, Mr. Irfan Mehmood (Brother of CFO of CTTL, Mr. Imran Mehmood) was also 

tradin g through First Pakistan Securities Limited. The Brokerage house officials also acknowledge 

receipt and payment of money to and from other persons not directly involved with the OIB 

CONCLUSION 

In view of the above, it appears that OIB was facilitating the Group of individuals by allowing them to 

take huge trading positions in the shares of CTTL, financing massive positions in CFS, frequent 

exchange of payments and shares on behalf of OIB clients between various brokers. It is also evident 

that OIB was aiding and abbeting Insider Trading by the Group including officials of CTTL as the same 

was in the knowledge of the bro kerage house. 

It is therefore concluded that OIB was in violation 

of code of conduct of the Brokers and Agents 

Registration Rules 2001. 

69

5.2. 2 Al-Hoqani Securities (AHS) 


Corp. (Pvt) Ltd also played a key role in aiding and abbeting insider trading and 

market 

manipulation activities by the Group acting in concert. It has been found that a key member of 

the Group, Mr. Irfan Mehmood was operating through the Al-Hoqani Securities (AHS). A trader of Al- 

Hoqani Securities, Mr. Muhammad Hisar Ansari was operating through Foundation Securities. As per 

his written request all securities purchased were required to be transferred in the CDC account of Al- 

Hoqani Securities by Foundation Securities, and cheques for all sales proceeds were to be issued in the 

name of Al-Hoqani Securities by Foundation. 

While reviewing CDC activity in CTTL for Participant ID 06478 of M/s Al-Hoqani Securities, it 

revealed that a substantial quantity i.e., 11.5 million shares of CTTL were received from Investor a/c # 

39707 titled Ahmed Jamil Ansari (CEO of CTTL) on November 08, 2006. These shares were transferred 

to the sub-account of Mr. Irfan Mehmood (Brother of CFO of CTTL), a client of the brokerage house. 

The instance mentioned above, provided a major clue to the investigation and therefore we called up 

the Nominee Director of the Brokerage 

House to obtain a brief about the trading and related activities 

of its clients in the scrip of CTTL. Based on the briefing, we visited the brokerage house and obtained all 

documents pertaining to CDC movements for its client namely Irfan Mehmood identified as the biggest 

investor in the scrip. . 

Trading pattern of the brokerage house during the 

period under review is given hereunder: 

Date CFS Open CFS Open Ready Ready CFS CFS CFS Close CFS Close 

Buy Sale Buy Sale Release Release Buy Sale 

Financee Financier Buy Sale Financier Financee 

07-NOV-06 5,000 - 350,700 1,069,700 5,000 - 46,000 42,000 

08-NOV-06 42,000 46,000 241,000 231,000 - 46,000 139,400 100,000 

10-NOV-06 142,000 139,400 10,000 - - 41,400 40,900 - 

13-NOV-06 142,000 138,900 - 805,000 - 40,900 43,000 - 

14-NOV-06 142,000 141,000 955,100 141,200 - 30,400 30,400 - 

15-NOV-06 142,000 141,000 87,000 618,500 100,000 129,000 129,000 - 

16-NOV-06 42,000 141,000 - 1,579,800 - 137,500 137,500 - 

17-NOV-06 42,000 141,000 51,900 3,172,500 38,400 96,000 96,000 1,400 

20-NOV-06 5,000 141,000 2,500 100 - 21,300 21,300 1,100 

21-NOV-06 6,100 141,000 224,100 - - 19,700 19,700 - 

22-NOV-06 6,100 141,000 286,800 - - 20,200 20,200 59,000 

23-NOV-06 65,100 141,000 191,800 - - 5,500 105,500 - 

24-NOV-06 65,100 241,000 785,100 - - 76,000 76,000 - 

27-NOV-06 65,100 241,000 1,000 - - 75,000 75,000 - 

28-NOV-06 65,100 241,000 800,800 - - 90,900 90,900 - 

70

29-NOV-06 65,100 241,000 500,000 - - 111,900 111,900 - 

30-NOV-06 65,100 241,000 224,800 - - 148,400 258,000 - 

01-DEC-06 65,100 350,600 3,489,200 - 1,100 231,900 148,300 - 

04-DEC-06 64,000 267,000 2,770,000 170,000 64,000 13,400 6,400 1,500,000 

05-DEC-06 1,500,000 260,000 5,700 1,005,700 - 10,500 9,600 - 

06-DEC-06 1,500,000 259,100 257,300 3,280,300 - 9,600 9,600 50,000 

07-DEC-06 1,550,000 259,100 - - 50,000 6,100 6,100 - 

08-DEC-06 1,500,000 259,100 - - - 4,600 - - 

11,234,800 12,073,800 

As per R-17(a) of the Karachi Automated Trading System (KATS) Regulations of Karachi Stock 


(Guarantee) Limited, “a member shall be responsible for all orders entered from his trading 

workstation(s)”. Further more as per code of conduct as prescribed in the Brokers and Agents 

Registration Rules 2001, Broker shall not create false market either singly or in concert with others or 

indulge in any act detrimental to the investor’s interest or which leads to interference with the fair and 

smooth functioning of the market. However keeping in view the trading pattern as well as the 

documents received from the brokerage house during the period under review it transpires that: 

• Substantial quantity of buying and selling of CTTL shares was done through the brokerage house 

during the period under review, though it pertained to its client Mr. Irfan Mehmood, but 

significant portion of buying and selling cancelled each other out without change in beneficial 

ownership thus creating artificial activity in the market. 

• We have observed various transactions where Al-Hoqani Securities made payments to various 


received payments from 

the clients of other brokerage houses on account of persons, who were 

part of the G roup. 

• Major shareholders of CT TL transferred the ir shares to Al-Hoqani Securities for onward 

transfer to 

its client Mr. Irfan Mehmood. The share s were then sold in the market or used for 

generating 

further refinance under Repo arrange ments. All these arrangements were made through Al- 

Hoqani Securities. Some instances of these tran sfers are given hereunder: Date Incoming Shares From Quantity Date Outgoing share s to Quantity 

Jan 26, 2006 Yuba Jamil 400,000 

Dec 31, 2005 to date Sold in the market 13,864,850 

Oct 17, 2006 CDC I nv A/c Mohd. 

Ajmal Ansari 

435,000 Nov 11, 2006 Muhammad Ajmal 

Ansari 

2, 000,000 

Oct 17, 200 6 CDC Inv A/c Yuba Jamil 1, 900,000 

Nov 16, 2006 First Pak Securities 2, 000,000 

Nov 8, 200 6 CDC Inv A/c 

Jamil Ansari 

Ahmed 

11,500,000 Nov 28, 2006 Trust Leasing 1, 640,420 

71

Dec 12, 2005Various 

t ransfers 

to 

16,646,501 Nov 29, 2006 Naveed Bukhari 700, 000 

Nov 8, 2006 

Nov 30, 2006 Naveed Bukhari 1, 300,000 

Dec 5, 20 06 Shahid 

Sec. 

Ali Habib 1,000,000 

Dec 7, 200 6 Irfan 

(MNS) 

Mehmood 350, 000 

Dec 31, 2005 to date Various other 

transfers 

3,220,000 

• On December 6, 2006 Al-Hoqani Securities paid Rs.50 m to OIBLtd for credit to account of Mr. Asim 

Fayyaz Qureshi on the instructions of its client Irfan Mehmood (Brother of CFO of CTTL). 

• Mr. Naveed Haider Bukari paid a cheque dated Dec 4, 2006 amounting to Rs.25m to Al-Hoqani 

• 

Securities. Al Hoquani Sec credited the account of its client Irfan Mehmood to the extent of this 

amount, however the cheque was subsequently dishonoured. Cheque Number was 5749298 and 

related to SCB-KHI. 

While reviewing Account opening form of Irfan Mehmood, initially Mr., Imran Mehmood was 

mentioned as the nominee. This was then crossed out and Mr. Kamran Mehmood’s name was 

inserted. Kamran Mehmood is brother of CTTL CFO. 

• An analysis of the pre-order session also revealed that bulk orders were entered through the 

brokerage house in order to lock the price of the share at the upper circuit level and lower circuit 

level on respective days. 

Following are instances: 

Date 

Time Client Order # Order Quantity 

Buy/ 

Sale 

Queued 

Price 

20061204 0930110141 003 25526822 200,000.00 Buy 102.05 

20061204 0930030033 003 25526469 200,000.00 Buy 102.05 

20061204 0930040031 003 25526545 200,000.00 Buy 

102.05 

20061204 0930050017 003 25526613 200,000.00 Buy 

102.05 

20061204 0930090011 003 25526657 200,000.00 Buy 102.05 

20061204 0930130095 003 25526984 100,000.00 Buy 102.05 

20061204 0930000004 003 25526351 200,000.00 Buy 102. 05 

20061204 0930020045 

003 25526392 

200,000.00 

Buy 102.05 

20061201 0915000008 

003 25403441 

200,000.00 

Buy 97.20 

20061201 0915140025 003 

25403784 200,000.00 Buy 

97.20 

20061201 0915160041 003 25403872 200,000.00 Buy 97.20 20061201 0915060009 

003 25403635 

200,000.00 

Buy 

97.20 

2 0061201 0915070001 

003 25403638 

200,000.00 Buy 

97.20 

20061201 0915070013 003 25403644 200,000.00 Buy 97.20 

72

20061201 0915100001 

003 25403659 200,000.0 0 Buy 97.20 

20061201 0915100007 003 25403662 200,000.00 Buy 97.20 

20061201 0915110007 

003 25403667 200,000.00 Buy 97.20 

20061201 0915150007 

003 25403813 200,000.00 Buy 97.20 

20061130 0930020049 003 25285648 200,000.00 Buy 

92.60 

20061130 0930040035 003 25285739 200,000.00 

Buy 92.60 

20061130 0930000020 003 25285550 

200,000.00 Buy 92.60 

20061130 0930010093 003 25285623 200,000.00 Buy 

92.60 

20061130 0930030057 003 25285697 200,000.00 Buy 92.60 

20061130 0930070009 003 25285851 200,000.00 Buy 

92.60 

20061130 0930090079 003 25285940 

200,000.00 Buy 92.60 

20061130 0930090011 003 25285906 

200,000.00 Buy 92.60 

20061130 0930080033 003 25285873 200,000.00 Buy 

92.60 

20061130 0930100057 003 25285972 200,000.00 Buy 92.60 

20061129 0930590007 003 25164900 250,000.00 Buy 88.20 

20061128 0930150075 003 25043302 250,000.00 Buy 84.00 

20061128 0930150075 003 25043302 250,000.00 Buy 84.00 

20061128 0930220063 003 25043761 250,000.00 Buy 84.00 

20061128 0930190059 003 25043610 250,000.00 Buy 84.00 

20061128 0930230035 003 25043793 250,000.00 Buy 84.00 

20061128 0930200029 003 25043651 250,000.00 Buy 84.00 

20061128 0930160049 003 25043368 250,000.00 Buy 84.00 

20061128 0930130125 

003 25043177 250,000.00 Buy 84.00 

20061128 0930170021 

003 25043434 250,000.00 Buy 84.00 

20061128 0930170139 003 25043493 250,000.00 Buy 84.00 

20061128 0930180103 003 25043553 250,000.00 Buy 84.00 

20061128 0930210009 003 25043687 250,000.00 Buy 84.00 

20061128 0930210085 003 25043725 

250,000.00 Buy 84.00 

20061127 0930480031 003 24924459 

300,000.00 Buy 80.00 

20061127 0930500013 003 24924482 300,000.00 Buy 

80.00 

20061127 0930510007 003 24924499 300,000.00 Buy 80.00 

20061127 0930510031 003 24924511 300,000.00 Buy 80.00 

20061127 0930520021 003 24924522 300,000.00 Buy 

80.00 

20061127 0930530017 003 24924533 

300,000.00 Buy 80.00 

20061127 0930540025 003 24924551 300,000.00 Buy 80.00 

20061127 093 0550011 003 24924569 300,000.00 Buy 

80.00 

20061127 0930560011 003 24924585 300,000.00 

Buy 

80.00 

20061127 0930570001 003 24924595 300,000.00 Buy 

80.00 

20061124 0915000010 003 24755097 250,000.00 Buy 

76.20 

20061124 0915010077 003 24755162 250,000.00 Buy 

76.20 

20061124 0915020019 003 24755178 250,000.00 Buy 

76.20 

20061124 0915030043 003 24755216 250,000.00 Buy 

76.20 

20061124 0915040025 003 24755253 250,000.00 Buy 

76.20 

20061124 0915140063 003 24755621 250,000.00 Buy 

76.20 

20061124 0915160111 003 24755795 250,000.00 Buy 

76.20 

20061124 0915210033 003 24756081 250,000.00 Buy 

76.20 

20061123 0936590025 003 24610638 300,000.00 Buy 72.60 

20061123 0937030009 003 24610673 300,000.00 Buy 72.60 

20061123 0937040007 003 24610685 300,000.00 Buy 72.60 

20061123 0937050011 003 24610693 300,000.00 Buy 72.60 

73

20061123 0937060009 003 24610702 300,000.00 Buy 72.60 

20061123 0937080003 003 24610718 300,000.00 Buy 72.60 

20061123 0937090001 003 24610733 300,000.00 Buy 72.60 

20061123 0937100021 003 24610757 300,000.00 Buy 72.60 

20061121 0930110115 003 24345524 250,000.00 Buy 65.90 

20061121 0930060005 003 24345161 250,000.00 Buy 65.90 

20061121 0930060039 003 24345178 250,000.00 Buy 65.90 

20061121 0930070035 003 24345212 250,000.00 Buy 65.90 

20061121 0930080019 003 24345258 250,000.00 Buy 65.90 

20061121 0930000012 003 24345005 250,000.00 Buy 65.90 

20061121 0930020059 003 24345099 250,000.00 Buy 65.90 

20061121 0930030011 003 24345110 250,000.00 Buy 65.90 

20061121 0930030038 003 24345123 250,000.00 Buy 65.90 

20061121 0930040027 003 24345137 250,000.00 Buy 65.90 

20061121 0930050005 003 24345146 250,000.00 Buy 65.90 

20061121 0930010013 003 24345063 250,000.00 Buy 65.90 

20061117 0941110023 003 24086349 250,000.00 Buy 58.90 

• A trader named Mr. Hisar Ansari at Al-Hoqani Securities was involved in trading in CTTL shares 

through Foundation Securities. Mr. Hisar Ansari’s father name is Abdul Latif and is resident of K- 

771, K Area Korangi, Karachi. As per his account openi ng form his occupation is service and has 

not designated any nominee. We noted that Mr. Hisar Ansari had given a written standing 

instructions d ated March 30, 2006 to Foundation Securities relating to his trading account contents 

of which are given hereunder: Quote-“Kindly transfer all shares to CDC Participant ID 0 6478 of Al-Hoqani Sec as and 

wh en I purchase thr ough you. Kindly always issu e cheque in favor of Al-Hoqani Sec as 


wh en I sale through you.” Unquote. 

Additionally while reviewing record s received from Foundation Securities, we noted following 

cheques were issued by Foundation Securities to Al-Hoqani Securities on account of trading of 

Hisar Ansa ri, details of which is g iven hereunder: 

Account tile Amount Cheque date Cheque Number Remarks if any 

Al-Hoqani Securities Rs.22,303,244 Dec 4, 2006 824617 

MCB Cutting observed on the cheque as 

initially account title was 

Muhammad Hisar Ansari 

Al-Hoqani Securities Rs.12 3,814,003 Dec 6, 2006 824 629 MCB 

Following are some payment made by Al-Hoqani Securities to Foundation 

Securities: 

Account tile 

Amount Cheque date Cheque Number Remarks if any 

Foundation Securities Rs. 1,056,685 Nov 15, 2006 531382 MCB K SE 

Foundation Securities Rs.400,328 Nov 23, 2006 17655246 PICIC K SE 

74

Foundation Securities Rs. 705,740 Nov 22, 2006 531394 MCB K SE 



Foundation Securities Rs.526,380 Nov 29, 2006 17655269 PICIC K SE 

Foundation Securities Rs.924,562 Dec 4, 2006 17655284 PICIC K SE 

Abo ve trading by Mr. Hisar Ansari and involvement 

of Al-Hoqani Securities in receipts and payments 

raised concerns that Al-Hoqani Securities might be involved in propri etary trading. When Chief 

Exec utive was questioned ba sed on above evidence, he informed that M r. Hisar’s trading has nothing 

to do with Al-Hoqani Securi ties, infact 

Mr. Hisar Ansari was trading on the instructions of Mr. Irfan 

Mehmood, a client of Al-Hoqani Securities and part of Group. On our inquiry regarding receipts and 

payment of cheques on accou nt of Mr. Hisar Ansari, CEO of Al-Hoqani 

informed us that all receipts 

and payments, whenever received, w ere instantaneously debited/ cred ited to IM’s Accoun t. The CEO 

of Al-Hoqani Securities agreed to provide us evidence in support of the claim. 

Subsequently 

on January 16, 2007, the Brokerage House provided the following written statement: 

“This 

is to confirm you that our trader Mr. Muhammad Hisar Ansari have sold 1,250,000 shares of Callmate 

Telips 

Telecom through M/s Foundation Securities (Pvt) Limited on instruction of Mr. Irfan Mehmood on 

December 

1, 2006. Please also note that proceeds from these sales have been transferred to Mr. Irfan Mehmood 

account 

maintained with us. “ 

The owner of AHS has an account with First Capital Equities Limited and during the period under 

review Mr. Suleman Ahmed Saeed Al-Hoqani has 

traded extensively in CTTL shares. 

The 

above facts prove that Al-Hoqani Securities was not ignorant of the insider trading and 

manipulative practices being undertaken by its client Irfan 

Mehmood, a member of Group. 

CONCLUSION 

In view of the above, it is evident that Al-Hoqani Securities was facilitating Irfan Mehmood by allowing 

him to take huge trading positions in the shares of CTTL, frequent exchange of payments on behalf of 

clients of various brokers and transfer of shares in CDC. 

It is therefore concluded that the Brokerage House has been in violation of R -12 of code of conduct 

of 

Brokers and Agents Registration Rules 2 001. 

75

5.2.3 First National Equities (FNEL) 

First National Equities (FNEL) was also used by the Group for insid er trading and market 

manipulation activities. Asi m Fayyaz Qureshi and Muham mad Ashraf Khan, key members of Group, 

opened 

their accounts on Nov 11, 2006 and Oct 12, 2006 respectively. First Pakistan Securities Limited, a 

member firm of Lahore Stock Exchange and related party to the FNEL also traded actively in the CTTL 

scrip. 

Trading pattern of the brokerage house during the period under review is given hereunder: 

Date CFS 

Open Buy 

CFS Open 

Sale 

Ready 

Buy 

Ready 

Sale 

CFS 

Release 

Buy 

CFS 

Release 

Sale 

CFS 

Close 

Buy 

CFS Close 

Sale 

07-NOV-06 11,700 200 117,700 135,200 11,700 200 - 27,900 

08-NOV-06 27,900 - 165,600 174,100 27,900 - - 60,800 

10-NOV-06 60,800 - 30,000 62,100 60,800 - - 37,000 

13-NOV-06 37,000 - 1,539,500 60,300 37,000 - 1,308,300 1,576,500 

14-NOV-06 1,576,500 1,308,300 73,900 167,700 148,700 108,100 26,000 222,500 

15-NOV-06 1,650,300 1,226,200 89,600 80,300 197,500 - 636,300 286,800 

16-NOV-06 1,739,600 1,862,500 634,500 375,400 283,800 606,700 36,500 505,900 

17-NOV-06 1,961,700 1,292,300 5,925,700 846,000 508,900 56,500 84,000 5,762,700 

20-NOV-06 7,240,400 1,344,700 33,400 1,500 312,200 - - 341,700 

21-NOV-06 7,269,900 1,344,700 4,600 1,000 419,000 24,900 702,200 382,900 

22-NOV-06 7,233,800 2,022,000 105,100 58,700 378,700 662,600 480,000 483,800 

23-NOV-06 7,338,900 1,839,400 372,900 13,100 343,900 172,300 397,000 716,800 

24-NOV-06 7,711,800 2,064,100 340,700 42,000 1,042,000 78,000 1,181,700 1,382,600 

27-NOV-06 8,052,400 3,167,800 104,000 17,600 1,960,600 281,600 1,328,000 2,064,600 

28-NOV-06 8,156,400 4,214,200 3,821,800 145,000 1,466,600 193,100 1,502,500 5,288,100 

29-NOV-06 11,977,900 5,523,600 2,406,600 1,174,100 1,968,300 529,000 291,200 3,905,600 

30-NOV-06 13,915,200 5,285,800 2,651,300 163,400 7,242,000 3,567,300 2,473,500 8,865,500 

01-DEC-06 15,538,700 4,192,000 5,789,300 1,419,300 1,775,700 130,700 2,600,000 5,553,800 

04-DEC-06 19,316,800 6,661,300 44,800 4,215,100 5,057,800 915,600 544,800 619,300 

05-DEC-06 14,878,300 6,290,500 421,000 2,098,800 4,435,600 2,533,900 1,319,300 2,273,900 

06-DEC-06 12,716,600 5,075,900 120,100 142,200 1,044,600 124,700 975,000 1,055,300 

07-DEC-06 12,727,300 5,926,200 35,400 26,100 307,700 465,600 - 343,600 

08-DEC-06 12,763,200 5,460,600 1,800 14,500 100,000 3,300 - - 

24,829,300 11,433,500 

As per R-17(a) of the Karachi Automated Trading System (KATS) Regulations of the Karachi Stock 

Exchange (Guarantee) Limited, “a member shall be responsible for all orders entered from his trading 

workstation(s). Further more as per code of conduct as prescribed in the Brokers and Agents 

Registration Rules 2001, Broker shall not create false market either singly or in concert with others or 

indulge in any act detrimental to the investor’s 

interest or which leads to interference with the fair and 

76

smooth functioning of the market. However keeping in view the trading pattern as well as the 

documents received FNEL during the period under review it transpires that: 

• Substantial quantity of buying and selling of CTTL shares was conducted through the brokerage 

house (Refer Nov 20, 21, 22, 23, 24, 27, 28, 29, 30, and Dec 1, 2006) at the same or almost at the same 

rate which shows that false impression of active trading in the scrip was being created. 

• We have observed 

various transactions where First National Equities made payment to clients and 

received payments from clients of other brokerage houses directly. 

• We fu rther noted various instances 

where 

the brokerage 

house 

pu t bulk quantity of orders in the 

pre-open trading session to influence 

the market price 

of the CTTL. 

Following 

are instances: 

Order 

Queu ed 

Date Time Client Order # Quantity 

Price 

20061207 0930030 153 487 25914563 250,000.00 87 .50 

20061207 0930040023 487 

25914585 250,000.00 

87 .50 

20061207 0930050019 

487 

25914598 250, 000.00 87.50 

2006120 7 0930000056 487 25914252 250, 000.00 87 .50 

2006120 7 0930080043 

487 25914658 250,000.00 87.50 

20061207 0930020165 487 25914464 250,000.00 87.50 

20061207 0930060033 IP 25914620 250,000.00 87.50 

20061207 0930000030 IP 25914239 250,000.00 87.50 

20061207 0930000032 IP 25914240 250,000.00 87.50 

20061207 0930000052 IP 25914250 250,000.00 87.50 

20061207 0930000058 IP 25914253 250,000.00 87.50 

20061207 0930000062 IP 25914255 250,000.00 87.50 

20061207 0930030017 IP 25914495 250,000.00 87.50 

20061207 0930030049 IP 25914511 250,000.00 87.50 

20061207 0930060019 FP 25914613 200,000.00 87.50 

20061207 0930070017 FP 25914629 200,000.00 87.50 

20061207 0930040015 FP 25914581 200,000.00 87.50 

20061207 0930050017 FP 25914597 200,000.00 87.50 

20061207 0930000022 FP 25914235 200,000.00 87.50 

20061207 0930180017 FP 25915324 200,000.00 87.50 

20061207 0930010101 FP 25914346 200,000.00 87.50 

20061207 0930020109 FP 25914436 200,000.00 87.50 

20061207 0930160031 FP 25915170 200,000.00 87.50 

20061207 0930030109 FP 25914541 200,000.00 87.50 

20061204 0930200089 FP 25527162 100,000.00 102.05 

20061204 0930220051 FP 25527265 200,000.00 102.05 

20061204 0930250001 FP 25527273 200,000.00 102.05 

20061204 0930270001 FP 25527279 100,000.00 102.05 

20061204 0930040115 FP 25526587 200,000.00 102.05 

20061204 0930080003 FP 25526651 200,000.00 102.05 

20061204 0933420003 FP 25528067 200,000.00 102.05 

20061204 0930150003 FP 25526992 200,000.00 102.05 

20061204 0930180001 FP 25527004 200,000.00 102.05 

77

20061204 0933440007 FP 25528079 200,000.00 102.05 

20061204 0930100144 FP 25526730 100,000.00 102.05 

20061204 0933580005 FP 25528146 100,000.00 102.05 

20061201 0915250005 0525 25404028 200,000.00 97.20 

20061201 0915000016 0525 25403445 200,000.00 97.20 

20061201 0915010093 0525 25403517 200,000.00 97.20 

20061201 0915040021 0525 25403621 200,000.00 97.20 

20061201 0915050007 0525 25403627 200,000.00 97.20 

20061201 0915060013 0525 25403637 200,000.00 97.20 

20061201 0915080005 0525 25403648 200,000.00 97.20 

20061201 0915030001 0525 25403567 200,000.00 97.20 

20061201 0915140009 FP 25403776 200,000.00 97.20 

20061201 0916510021 FP 25404610 200,000.00 97.20 

20061201 0916520007 FP 25404614 200,000.00 97.20 

20061201 0916530013 FP 25404623 200,000.00 97.20 

20061201 0916540013 FP 25404630 200,000.00 97.20 

20061201 0915150045 FP 25403832 200,000.00 97.20 

20061201 0916500001 FP 25404594 200,000.00 97.20 

20061201 0915280001 P190 25404040 200,000.00 97.20 

20061201 0915260005 P190 25404035 200,000.00 97.20 

20061201 0915000036 P190 25403455 200,000.00 97.20 

20061201 0915000044 P190 25403459 200,000.00 97.20 

20061201 0915030069 P190 25403601 200,000.00 97.20 

20061130 0934490005 0525 25289189 200,000.00 92.60 

20061130 0934510015 0525 25289216 200,000.00 92.60 

20061130 0934540017 0525 25289242 200,000.00 92.60 

20061130 0934570011 0525 25289276 200,000.00 92.60 

20061130 0935010003 0525 25289303 200,000.00 92.60 

20061130 0930030005 FP 25285671 200,000.00 92.60 

20061130 0930050023 FP 25285777 200,000.00 92.60 

20061130 0930000030 FP 25285555 200,000.00 92.60 

20061130 0930150103 FP 25286277 200,000.00 92.60 

20061130 0930010091 FP 25285622 200,000.00 92.60 

20061130 0930040009 FP 25285726 200,000.00 92.60 

20061130 0930060037 FP 25285830 200,000.00 92.60 

20061130 0930070001 FP 25285847 200,000.00 92.60 

20061130 0930080003 FP 25285858 200,000.00 92.60 

20061130 0930190043 FP 25286519 125,000.00 92.60 

20061129 0944520027 AN 25173685 300,000.00 80.00 

20061129 0944570021 AN 25173769 300,000.00 81.00 

20061127 0931420009 FP 24925410 300,000.00 80.00 

20061127 0931430023 FP 24925436 300,000.00 80.00 

20061127 0931480015 FP 24925513 300,000.00 80.00 

20061127 0931490023 FP 24925539 300,000.00 80.00 

20061127 0931500027 FP 24925556 300,000.00 80.00 

20061127 0931510021 FP 24925574 300,000.00 80.00 

20061127 0931580031 FP 24925683 300,000.00 80.00 

20061127 0932010015 FP 24925725 100,000.00 80.00 

20061127 0930000014 P190 24922810 250,000.00 80.00 

20061127 0930000024 P190 24922815 300,000.00 80.00 

78

20061127 0930000046 P190 24922826 250,000.00 80.00 

20061124 0925500005 810500 24761282 200,000.00 76.20 

20061124 0926020005 810500 24761405 200,000.00 76.20 

20061124 0915020035 FP 24755186 300,000.00 76.20 

20061124 0915040013 FP 24755247 300,000.00 76.20 

20061124 0915100003 FP 24755364 300,000.00 76.20 

20061124 0915110037 FP 24755410 300,000.00 76.20 

20061124 0916550001 FP 24757054 300,000.00 76.20 

20061124 0916570001 FP 24757069 300,000.00 76.20 

20061124 0917150001 FP 24757209 300,000.00 76.20 

20061124 0917170013 FP 24757226 300,000.00 76.20 

• While reviewing Account Opening form of Asim Fayyaz Qureshi, we observed that he has 

nominated Mr. Muhammad Ashraf Khan, another client of FNEL and an active member of 

Group. This proves that these persons are connected and that FNEL was also in the knowledge. 

• Instances were noted where trading was allowed to FNEL clients even though the client had 

huge debit balances. For instances in case of Muhammad Ashraf Khan debit balance went upto 

Rs.72 m on Nov 13, 2006. Like wise in case of First Pakistan Securities Ltd (FPSL) debit balances 

amounted to Rs.318m on Nov 23, 2006. 

• While reviewing account opening form of FPSL following information regarding the client was 

noted: 

o Details as per the account opening form 

i. Mr. Saeed Ahmed Bajwa CEO 

ii. Mr. Waqas Usmani COO 

iii. Mr. Naveed Ishaque Head of Operations 

o As per the Memorandum of Association of FPSL following persons are subscriber to 

the Memorandum 

- Mrs. Adeela Ali w/o Ali A. Malik 

- Mr. Iftikhar Ahmed Kirmani s/o Syed Fazal Shah Kirmani 

It should be noted that when FPSL was asked to provide information about trading in CTTL during 

the period under review, we were informed that almost all trading by FPSL through FNE relates to 

their client Mr. Irfan Mehmood. However while reviewing FNEL ledger of FPSL, FPSL instructed 

79

FNEL on November 6, 2006 to issue cheque of Rs. 104.4 million in favor of Faysal Bank Limited for 

credit of FPSL account with the bank, as informed by FNEL. 

• Mr. Irfan Mehmood paid a cheque amount of Rs. 80 million to FNEL for credit of FNEL Client Mr. 

Asim Fayyaz Qureshi. Cheque number was 7706205 dated December 4, 2006 pertaining to SCB- 

KCH. The cheque was dishonoured subsequently. It should be noted that Irfan Mehmood is not a 

client of FNEL, but is a key member of Group. 

• On Dec 5, 2006 Mr. Irfan Mehmood paid a cheque to FNEL for Rs. 80 million against debit balance 

of First Pakistan Securities Limited at FNEL. The cheque was dishonoured subsequently. 

• On the written instructions of FPSL, who is a client of Orix Investment Bank, OIBissued the 

following cheques: 

Cheque 

Number 

Cheque date Amount Beneficiary Payer On account of 

576474 MCB Dec 1, 2006 100,753,920 FNEL for A/c Orix Investment Sale of 1,200,000 

KSE 

of FPSL Bank 

CTTL shares 

438008 MCB 

KSE 

Dec 12, 2006 53,222,426 FNEL for A/c 

of FPSL 

Orix Investment Sale of 575,000 

Bank 

CTTL shares 

• FNEL made an arrangement with Muhammad Ashraf Khan, (key member of Group and joint client 

of OIBand FNEL) whereby financing was provided against 2,000,000 CTTL shares at Rs.50/-. 

Details are given hereunder: 

o On October 10, 2006 out of 2m shares, 942,000 shares were transferred to FNEL. On Oct 16, 

2006 OIB received Rs.47,145,000 against above shares. 

o On October 18, 2006 out of 2m shares, 1,057,100 shares were transferred to FNEL. On Nov 

13, 2006 OIB received Rs.52,855,000 against above shares. 

• We noted instances of bulk quantity Client to Client transactions and Member to Member 

transactions through the brokerage house. Following are two instances: 

o On Nov 22, 2006 through Orix Investment Bank, Mr. Muhammad Ajmal Ansari sold 

1,500,000 shares of CTTL to FNEL and others at the rate of Rs.69.15. FNEL was a major buyer 

in that Cto C transaction and quantity bought amounted to 1,275,000 shares. 

o On Nov 24, 2006 through Orix Investment Bank, Mr. Muhammad Ajmal Ansari sold 

1,885,000 shares of CTTL to FNEL, Bank of Khyber and others at the rate of Rs.76.20. FNEL 

80

CONCLUSION 

and BOK were major buyer in that C to C transaction and quantity bought amounted to 

500,000 shares and 1,000,000 shares respectively. 

In view of the above, it appears that First National Equities was facilitating the Group by allowing them 

to take huge trading positions in the shares of CTTL, frequent exchange of payments on behalf of the 

clients between various brokers and transfer of shares in CDC. FNEL was actively assisting its clients to 

manipulate the price in pre-open sessions. 

It is therefore concluded that the Brokerage House was in violation of of the R-12 of code of the conduct 

of the Brokers and Agents Registration Rules 2001. 

81

5.2.4 Shahihd Ali Habib Securities (SAHS) 

The Brokerage house has two clients who traded in CTTL. Mr. Junaid Habib bought 1.5m shares of 

CTTL on Dec 5, 2006 and the same were financed through CFS on the same day. Whereas another client 

Mr. Naveed Haider Bukhari bought 574,500 shares on Dec 1, 2006 and 6,000,000 shares on Dec 4, 2006. 


CFS 

Release 

Buy 

CFS 

Release 

Sale 

CFS 

Close 

Buy 

CFS 

Close 

Sale 

CFS Open CFS Open Ready Ready 

Date Buy Sale Buy Sale 

07-NOV-06 - - 21,500 64,500 - - - 6,000 

08-NOV-06 6,000 - 14,200 19,200 6,000 - - 1,000 

10-NOV-06 1,000 - 1,500 1,000 - - - - 

13-NOV-06 1,000 - 16,100 11,100 - - - 9,000 

14-NOV-06 10,000 - 6,500 12,500 6,000 - - - 

15-NOV-06 4,000 - 11,200 8,200 - - - 4,000 

16-NOV-06 8,000 - 26,500 41,500 4,000 - - 8,000 

17-NOV-06 12,000 - 38,000 46,100 8,000 - - - 

20-NOV-06 4,000 - 100 - - - - 100 

21-NOV-06 4,100 - 200 100 - - - - 

22-NOV-06 4,100 - 5,600 - - - - 5,600 

23-NOV-06 9,700 - - - - - - - 

24-NOV-06 9,700 - 1,000 - - - - - 

27-NOV-06 9,700 - 300 - - - - 100 

28-NOV-06 9,800 - 6,000 - - - - 6,000 

29-NOV-06 15,800 - 1,000 12,000 10,700 - - - 

30-NOV-06 5,100 - 43,000 1,000,000 - - - 43,000 

01-DEC-06 48,100 - 595,500 71,500 48,000 - - 574,500 

04-DEC-06 574,600 - 6,021,700 10,800 100 - - 6,011,000 

05-DEC-06 6,585,500 - 1,563,000 4,000 - - - 1,559,000 

06-DEC-06 8,144,500 - 9,500 35,500 37,600 - - 11,600 

07-DEC-06 8,118,500 - - - 1,500,000 - - - 

08-DEC-06 6,618,500 - - 1,300 - - - - 

8,382,400 1,339,300 

We also noted that a cheque dated Dec 6, 2006 amounting Rs.80m paid by Naveed Haider Bukhari from 

his own account was dishonoured. 

Few instances were also noted where buying and selling at the same rate on the same day, though 

comprising little volume, occurred. 

82

CONCLUSION: 

We have not found any conclusive evidence to suggest that the brokerage house was in violation of the 

R-12 of code of the conduct of the Brokers and Agents Registration Rules 2001. 

83

5.2.5 Noman Abid & Company (NA) 


CFS Open CFS Open Ready Ready CFS Release CFS Release CFS Close CFS Close 

Date Buy Sale Buy Sale Buy Sale Buy Sale 

07-NOV-06 - - - 3,000 - - - - 

08-NOV-06 - - - 3,500 - - - - 

10-NOV-06 - - 500 - - - - 500 

13-NOV-06 500 - - - 500 - - - 

14-NOV-06 - - 69,500 14,000 - - - - 

15-NOV-06 - - - 15,000 - - - - 

22-NOV-06 - - - 1,200 - - - - 

23-NOV-06 - - - 2,500 - - - - 

24-NOV-06 - - - 500 - - - - 

28-NOV-06 - - - 2,000 - - - - 

29-NOV-06 - - - 44,000 - - 375,000 - 

30-NOV-06 - 375,000 - 2,000 - 289,000 15,400 - 

01-DEC-06 - 101,400 1,000 3,100 - 31,400 30,700 - 

04-DEC-06 - 100,700 1,000,000 1,400 - 30,700 30,700 1,000,000 

05-DEC-06 1,000,000 100,700 502,300 - 1,000,000 99,700 1,599,300 1,502,300 

06-DEC-06 1,502,300 1,600,300 300 200 500,000 523,600 373,600 500,100 

07-DEC-06 1,502,400 1,450,300 - - - 22,000 18,000 - 

08-DEC-06 1,502,400 1,446,300 - 7,800 244,300 253,900 - - 

1,573,600 100,200 

Brokers and Agents Registration Rules, 2001- R-13 Brokers to abide by code of conduct 

We have observed an instance where Noman Abid & Co. received payment amounting Rs. 5 million 

from Mr. Irfan Mehmood (Brother of CFO of CTTL), for account of Naveed Haider Bukhari on Dec 7, 

2006. IM is an active member of Group. 

An active member of the Group Mr. Naved Haider Bukhari was also trading through the brokerage 

house. It appears that Insider Trading being done by the Group was in the knowledge of NA. 

CONCLUSION 

We have not found any conclusive evidence to suggest that the NA was in violation of the R-12 of code 

of the conduct of the Brokers and Agents Registration Rules 2001. 

84

5.2.6 First Capital Equities Limited (FCEL) 


CFS 

Release 

Buy 

CFS 

Release 

Sale 

CFS 

Close 

Buy 

CFS 

Close 

Sale 

CFS Open CFS Open Ready 

Date Buy Sale Buy Ready Sale 

07-NOV-06 64,000 - 197,000 78,100 64,000 - - 152,500 

08-NOV-06 152,500 - 82,600 48,200 152,500 - - 190,000 

10-NOV-06 190,000 - 25,200 19,700 190,000 - - 189,000 

13-NOV-06 189,000 - 157,500 69,200 189,000 - - 282,000 

14-NOV-06 282,000 - 177,300 17,900 282,000 - - 441,100 

15-NOV-06 441,100 - 105,100 187,600 441,100 - - 366,100 

16-NOV-06 366,100 - 225,800 136,200 366,100 - - 495,400 

17-NOV-06 495,400 - 134,800 360,700 495,400 - - 304,800 

20-NOV-06 304,800 - 1,000 3,400 304,800 - - 284,400 

21-NOV-06 284,400 - - 700 284,400 - - 284,100 

22-NOV-06 284,100 - 20,500 28,200 284,100 - - 304,600 

23-NOV-06 304,600 - 7,000 912,000 304,600 - - 247,900 

24-NOV-06 247,900 - 20,000 419,500 247,900 - - 251,400 

27-NOV-06 251,400 - 15,200 102,200 251,400 - - 256,400 

28-NOV-06 256,400 - 236,400 2,624,600 256,400 - - 449,100 

29-NOV-06 449,100 - 131,700 633,900 449,100 - - 438,000 

30-NOV-06 438,000 - 8,300 11,800 438,000 - - 439,200 

01-DEC-06 439,200 - 268,000 345,400 439,200 - - 473,700 

04-DEC-06 473,700 - 298,200 431,900 5,000 - - 472,200 

05-DEC-06 940,900 - 35,700 19,500 471,900 - - 6,500 

06-DEC-06 475,500 - 37,700 52,300 475,500 - - 479,400 

07-DEC-06 479,400 - 2,300 243,800 479,400 - - 234,900 

08-DEC-06 234,900 - - 100 234,900 - - - 

2,187,300 6,746,900 

The clients who traded in CTTL through FCEL includes Mr. Naveed Haider Bukhari, Mr. Asim 

Mehmood and Mr. Suleman Ahmed Saeed Al-Hoqani. 

CONCLUSION 

We have not found any conclusive evidence to suggest that the brokerage house was in violation of the 

R-12 of code of the conduct of the Brokers and Agents Registration Rules 2001. 

85

5.2.7 FIRST PAKISTAN SECURITIES (FPS): 

First Pakistan Securities is a member of Lahore Stock Exchange. It has been trading with First National 

Equities and Orix Investment Bank. During the period under review we have been informed by the 

brokerage house that almost all the trading pertains to its client Mr. Irfan Mehmood, brother of Imran 

Mehmood, CFO of CTTL. 

During the period under review trading pattern of the Brokerage house under CTTL scrip, executed 

through two KSE members namely OIBand First national Equity Limited is given below: 

Open CFS Buy Sale Avg. Avg. Buy Avg. Sale Financee Market % to 

Date Position Volume Volume Price Value Value Qty. Volume M.V 

07 Nov 2006 - - 1,000 52.25 - 52,250 - 6,640,900 0.02 

16 Nov 2006 - 38,500 - 56.72 2,183,592 - 38,500 6,022,600 0.64 

17 Nov 2006 38,500 5,395,500 - 59.09 318,824,646 - 5,395,500 12,585,300 42.87 

17 Nov 2006 - 88,400 58.46 - 5,167,864 - 12,585,300 0.70 

20 Nov 2006 5,395,500 600 - 62.80 37,680 - 5,396,100 690,900 0.09 

21 Nov 2006 5,396,100 700 - 65.90 46,130 - 5,396,800 586,100 0.12 

22 Nov 2006 5,396,800 89,400 - 69.15 6,182,010 - 5,486,200 1,614,700 5.54 

23 Nov 2006 5,486,200 169,000 - 72.60 12,269,400 - 5,655,100 1,996,800 8.46 

23 Nov 2006 - 100 72.60 - 7,260 - 1,996,800 0.01 

24 Nov 2006 5,655,100 227,100 - 76.20 17,305,020 - 5,625,500 1,839,500 12.35 

28 Nov 2006 5,549,500 2,001,000 - 84.00 168,084,000 - 6,330,500 7,204,000 27.78 

28 Nov 2006 - 1,210,000 84.00 - 101,640,000 - 7,204,000 16.80 

29 Nov 2006 6,330,500 - 25,000 88.15 - 2,203,750 6,315,500 10,518,600 0.24 

30 Nov 2006 6,315,500 1,622,500 - 92.60 150,243,500 - 7,953,000 4,568,500 35.51 

30 Nov 2006 - 575,000 92.60 - 53,245,000 - 4,568,500 12.59 

01 Dec 2006 7,953,000 1,165,500 - 97.20 113,286,600 - 9,068,500 15,376,600 7.58 

01 Dec 2006 - 25,000 97.20 - 2,430,000 - 15,376,600 0.16 

04 Dec 2006 9,068,500 - 2,800,000 102.05 - 285,740,000 5,768,500 15,554,200 18.00 

05 Dec 2006 5,768,500 25,000 - 96.90 2,422,500 - 4,818,500 8,769,500 0.29 

05 Dec 2006 - 600,000 97.18 - 58,310,000 - 8,769,500 6.84 

07 Dec 2006 4,818,500 - 18,100 87.50 - 1,583,750 4,818,500 322,700 5.61 

08 Dec 2006 4,818,500 - 6,200 83.15 - 515,530 4,818,500 75,600 8.20 

Total 10,734,800 5,348,800 73.67 95.52 

Further review of table shows instances where substantial quantities of shares were bought and on the 

same day were squared up at the same rate. Refer Trading on Nov 28, 2006 and Nov 30, 2006. 


During the period under review the buying and selling by FPS on account of its client in CTTL shares 

(5.1.8.1), some times exceeded 42% of the market turnover of the particular day (Refer Trading on Nov 

17, 2006). 

86

Additionally an instance has been noted where an attempts was made by the Brokerage house on 

account of its Client to influence to price during the trading sessions. 

Date UIN Buy Frequency Open High Low Close Range Buy 

Volume 

17 Nov 2006 00000012207/20020902 Buy 126 57.75 59.85 57.2 59.85 9.7 5,395,500 


While reviewing pre-open session bids and offers data, we observed instances where AFQ manipulated 


applicable. An analysis of Pre-open session has revealed an abnormal trading behavior of the 

Brokerage house that has been summarized below: 

Total 

Total As % to 

Member Order No. of Orders Queued Market Market 

Date Open Close Client Name code Qty Lot orders Qty Price Turnover Turnover 

24-Nov 72.6 76.2 First Pakistan Sec Ltd 175 300,000 8 2,400,000 76.2 1,839,500 130% 

300,000 7 2,100,000 

27-Nov 76.2 80 First Pakistan Sec Ltd 175 100,000 1 100,000 80 2,890,300 76% 

200,000 9 1,800,000 

30-Nov 88.2 92.6 First Pakistan Sec Ltd 175 125,000 1 125,000 92.6 4,568,500 42% 

1-Dec 92..60 97.2 First Pakistan Sec Ltd 175 200,000 7 1,400,000 97.2 15,376,600 9% 

101.9 

100,000 3 300,000 

4-Dec 97.2 5 First Pakistan Sec Ltd 175 200,000 8 1,600,000 102.05 15,554,000 12% 

7-Dec 92.1 87.5 First Pakistan Sec Ltd 175 200,000 10 2,000,000 87.5 322,700 620% 

Furthermore, while reviewing the trading pattern of the FPSL it has been observed that bulk quantity of 

CTTL shares was bought at lower values and subsequently the shares were sold at higher prices. Please 

refer table given in 5.1.8.1 which shows that bulk quantity of shares were bought on Nov 17 and Nov 

28, 2006 at relatively lower prices whereas selling at higher prices was done on Nov 28 and Dec 4, 2006. 

CONCLUSION: 

In view of the above, it appears that FPSL was facilitating the Group by allowing them to take huge 

trading positions in shares of CTTL, financing their massive positions in CFS, influencing price of the 

scrip by way of putting bulk quantity orders at the upper. Lower level price locks during pre-open 

trading sessions. 

87

It is therefore concluded that the Brokerage House was in violation of the R-12 of code of the conduct of 

the Brokers and Agents Registration Rules 2001. 

88

5.3 FINDINGS RELATED TO OTHER ACTIVE TRADING PERSONS 

5.3.1 JUNAID HABIB (JH) - Non Group Member: 

Junaid Habib is a client of Shahid Ali Habib Securities limited. He opened his account on June 16, 2006 

but only traded in December 2006. The share position of JH as on December 8, 2006 include: 

Shares in Shares under Shares placed under Total Holding % age of total 

CDS CFS Repo Arrangement 

paid up capital 

0 1,500,000 0 1,500,000 2.29% 


During the period under review trading position of JH is given hereunder: 

Date 

Open 

Position Buy Sale Avg. 

Sale Financee Market 

CFS Volume Volume Price Buy Value Value Qty. Volume 

28 Nov 2006 - - - - - - - 7,204,000 

01 Dec 2006 - - - - - - - 15,376,600 

01 Dec 2006 - - - - - - 15,376,600 

04 Dec 2006 - - - - - - 15,554,200 

04 Dec 2006 - - - - - 15,554,200 

05 Dec 2006 - 1,500,000 - 98.21 147,321,610 - 1,500,000 8,769,500 

07 Dec 2006 1,500,000 - - - - - 1,500,000 322,700 

Total 1,500,000 - 147,321,610 

Buy – Sale = 1,500,000 

o While reviewing client ledger provided by Shahid Ali Securities we noted that the trader of 

Junaid Habib and Naveed Haider Bukhari (It may be noted that Naveed Hailer Bukhari is the 

key member of the Group) is the same person, named Mr. Hasnain Ali. This fact could possibly 

point to the fact that Junaid Habib might be the part of Group. 

o JH activity in the market for the past month was restricted to 2,000 shares of AHSL. Purchase was 

paid by JH by cheque that was dishonored. Current position is that amounts due to Shahid Ali 

Habib Securities are still outstanding. 

o While reviewing account opening form and authority letter for trading, relating to Naveed 

Haider Bukhari, provided by Shahid Ali Habib Securities, we noted following important notes: 

Hasnain Ali, has been given authority to operate the account of Naveed H. Bukhari, 

An annotation has been given stating that “Same as Junaid Habib commission”. 

89

JH opened the account on June 16, 2006 and executed one transaction on Dec 5, 2006 and 

did not trade in CTTL or any other scrip. The modus operandi gives rise to the suspicion 

that he was fronting for one of the Group members. 

Conclusion: The methodology adopted by the Junaid Habib for trading and timing of the trading 

together with the fact that he did not pay for the purchase that he made, is similar to the modus operandi 

adopted by other members of the Group, and there seems to be possibility that he may be some how 

associated with the Group. 



20061201 Buy 7 91 92 91 92 50,000 

20061204 Buy 10 97.8 99 97.8 99 150,000 

Please refer Annexure 10H for graphical presentation for above referred activity. 

Conclusion: Above instances indicate that attempts were made by JH to buy on uptick and thus 

manipulate the share price. However since the volumes are so little, it could not possibly be a violation 

of S-17e of Securities and Exchange Ordinance 1969. 



No instances were found. 








90




Name Junaid Habib 

Father Name Habib Ahmed 


CNIC No. 42501-9719313-7 

Family No. J9N94V 

Address House No. 174, DOHS, Phase 1, Malir Cantt., Karachi 

Details of the nominee from the account opening form of Shahihd Ali Habib Securities are as follows: 

Name of nominee Mrs. Asfia Junaid 

Husband Name Junaid Habib 

CNIC No. 42201-0462800-8 

Address House No. 174, DOHS, Phase 1, Malir Cantt., Karachi 

Conclusion 

Based on the observations noted above it could not be conclusively proven that JH, assisted the Group in 

wash sales and price manipulation. 

91

5.3.2 Mohammad Aqeel (MA) - Non Group Member: 

Mohammad Aqeel is a client of Motiwala Securities. The share position of the client as on Dec 8, 2006 

include: 

Shares in Shares under Shares placed under Total Holding % age of total paid 

CDS CFS Repo Arrangement 

up capital 

0 3,900,000 0 3,900,000 5.97% 


Date 

Open CFS 

Position 

Buy 

Volume 

Sale 

Volume 

Avg. 

Price 

Avg. Buy 

Value 

Avg. Sale 

Value 

Financee 

Qty 

Market 

Volume 

07 Nov 2006 - - 75,000 54.90 - 4,117,500 6,640,900 

04 Dec 2006 - 1,299,500 - 101.99 132,533,367 - 1,299,500 15,554,200 

05 Dec 2006 1,299,500 2,600,500 - 96.90 251,988,450 - 3,900,000 8,769,500 

06 Dec 2006 3,900,000 - 100,000 92.40 - 9,240,000 3,800,000 5,823,400 

07 Dec 2006 3,800,000 100,000 - 87.50 8,750,000 - 3,900,000 322,700 

Total 4,000,000 175,000 393,271,817 13,357,500 

Buy – Sale = 3,825,000 

Copies of the cheques received from the client were not available with the brokerage house which 

limited our work to clearly establish that Muhammad Aqeel was trading in connivance with Group 

members. 

Conclusion: Although we have not been able to find any conclusive evidence that shows that MA was 

part of the Group, but the modus operandi, adopted by MA, i.e. timing and manner in which trading is 

done creates suspicion that Muhammad Aqeel was acting as front for the Group. 









92





Sold 75,000 shares on Nov 7, 2006 when he does not seem to have any beneficial interest. 


Details as per the CNIC: 

Name Muhammad Aqeel 

Father Name Suleman 

Date of Birth June 28, 1969 

CNIC No. 42000-0424029-5 

Family No. KN1C5S 

Address House No. 3, Younus Plaza, Chnadni Chowk, Karachi 

Details extracted from Account opening form of the client received from Motiwala securities Ltd: 

Address: Room-701, 7 th floor, Business & Finance trade Centre, I.I.Chundrigar Road, Karachi 

Tel: 2471689, 2471914-5 

Conclusion 

The modus operandi, adopted by MA, i.e. timing and manner in which trading is done creates suspicion 

that Muhammad Aqeel was acting as front for the Group or was a front for the brokerage house. 

However we have not been able to prove conclusively that this was the case. 

93

5.3.3 HABIB UN NISA (HUN) - Non Group Member: 

Habib un Nisa is the client of Sherman Securities. The client had no outstanding financing position by 

December 08, 2006. The share position of the client as on Dec 8, 2006 include: 

Shares Shares Shares placed under Total Holding % age of total paid 

in CDS under CFS Repo Arrangement 

up capital 

0 0 0 0 0 

5.3.3.1 Trading Pattern in ready Market 

Date 

Open. 

Position CFS 

Buy 

Volume 

Sale 

Volume 

Avg. 

Price 

Avg. Buy 

Value 

Avg. Sale Financee 

Value Qty. 

Market 

Volume 

15 Nov 2006 - 100,000 - 55.44 5,543,784 - 2,624,600 

16 Nov 2006 - 250,000 - 56.82 14,204,613 - 6,022,600 

16 Nov 2006 - - 100,000 56.68 - 5,667,857 6,022,600 

17 Nov 2006 - 674,800 - 57.78 38,987,234 - 12,585,300 

17 Nov 2006 - - 924,800 58.94 - 54,510,486 12,585,300 

20 Nov 2006 - 7,300 - 62.80 458,440 - 690,900 

21 Nov 2006 - 25,000 - 65.90 1,647,500 - 586,100 

22 Nov 2006 - 4,600 - 69.15 318,090 - 1,614,700 

23 Nov 2006 - 25,700 - 72.60 1,865,820 - 1,996,800 

24 Nov 2006 25,500 - 76.20 1,943,100 - 51,200 1,839,500 

27 Nov 2006 51,200 5,600 - 80.00 448,000 - 51,300 2,890,300 

28 Nov 2006 51,300 68,800 - 84.00 5,779,200 - 51,300 7,204,000 

29 Nov 2006 51,300 - 100,000 79.80 - 7,980,000 33,100 10,518,600 

01 Dec 2006 33,100 25,000 - 97.13 2,428,333 - 15,376,600 

01 Dec 2006 - - 176,000 95.41 - 16,792,600 15,376,600 

04 Dec 2006 - 10,000 - 101.00 1,010,000 - 10,000 15,554,200 

05 Dec 2006 10,000 15,000 - 100.39 1,505,850 - 25,000 8,769,500 

06 Dec 2006 25,000 25,000 - 92.10 2,302,500 - 5,823,400 

06 Dec 2006 - - 50,000 92.13 - 4,606,284 5,823,400 

Total 

Buy – Sale = (88,500) 

1,262,300 1,350,800 78,442,464 89,557,227 

Conclusion: HUN seems to be a classic day or short term trader. 


No instances of wash or circular trades were found as acting independently. 


No instances of violations noted. 



94

No instances of non-compliance were observed. 




While reviewing pre-open session bids and offers data, we observed instances where HUN manipulated 


applicable. An analysis of Pre-open session has revealed an abnormal trading behavior that has been 

summarized below: 

Total 

Total 

Order 

entered as 



24-Nov* 72.6 76.2 6 Buy 250,000 2 500,000 76.2 1,839,500 27% 

* She placed orders but did not execute. Did she place order or did broker use her name. 

Conclusion: Above instances tantamount to market manipulation and therefore attracts provisions of S- 

17e of Securities and Exchange Ordinance 1969. 



5.3.3.8 Non-compliance of Blank Selling Regulations 

On Dec 1, 2006 we noted that HUN had a short position of 88,500 shares in CTTL. Short position was 

reduced to 63,500 shares by Dec 5, 2006 but then on Dec, 6, 2006 it was increased back to 88,500. Since 

HUN has no beneficial interest, she indulged in blank selling. 



Name Habib un Nisa 

Father/Husband Name Abbas 

Date of Birth 

CNIC No. 42201-4282558-4 


Address 118/1, Mian Khyaban-e-Shaheen, Phase VI, DHA, Karachi 

Details of the nominee from the account opening form of Sherman Securities are as follows: 

95

Name of nominee Ahmed Mohiuddin 

Father Name Muhammad Fayyaz Hussain 

CNIC No. 42201-6511790-3 

Conclusion 

Based on the observations noted above it is evident that HUN, was violating the securities law by 

manipulating the price of the scrip in pre-open session and also by indulging in short selling. By 

indulging in above referred manipulative and prohibitive activities HUN has violated various law and 

regulations. 

96

5.3.4 Alishba Naz (ALN) - Non Group Member: 

Alishba Naz is the client of First National Equities Limited. The share position of ALN as on Dec 8, 2006 

include: 

Shares in Shares under Shares placed under Repo Total Holding % age of total paid 

CDS CFS 

Arrangement 

up capital 

0 0 0 0 0 

5.3.4.1 Trading Pattern in Ready Market 

Date 

Open CFS 

Position 

Buy 

Volume 

Sale 

Volume 

Avg. 

Price 

Avg. Buy 

Value 

Avg. Sale 

Value 

Financee 

Qty. 

Market 

Volume 

07 Nov 2006 - 10,000 - 54.90 549,000 - - 6,640,900 

08 Nov 2006 - - 10,000 54.50 - 545,042 - 2,826,900 

14 Nov 2006 - - 4,000 54.73 - 218,900 - 2,450,900 

15 Nov 2006 - 2,000 - 55.25 110,500 - - 2,624,600 

16 Nov 2006 - 275,800 - 56.88 15,687,477 - - 6,022,600 

16 Nov 2006 - - 184,300 57.12 - 10,527,719 - 6,022,600 

17 Nov 2006 - 24,400 - 57.00 1,390,800 - - 12,585,300 

17 Nov 2006 - - 106,900 57.84 - 6,183,119 - 12,585,300 

21 Nov 2006 - 200 - 65.90 13,180 - - 586,100 

22 Nov 2006 - - 200 69.15 - 13,830 - 1,614,700 

23 Nov 2006 - 120,200 - 72.60 8,726,520 - - 1,996,800 

24 Nov 2006 - 88,700 - 76.20 6,758,940 - - 1,839,500 

27 Nov 2006 - 2,500 - 80.00 200,000 - - 2,890,300 

28 Nov 2006 - 35,000 - 84.00 2,940,000 - - 7,204,000 

29 Nov 2006 - 648,000 - 80.07 51,883,593 - - 10,518,600 

29 Nov 2006 - - 675,400 86.08 - 58,139,498 - 10,518,600 

30 Nov 2006 - - 10,000 92.60 - 926,000 - 4,568,500 

01 Dec 2006 - - 15,000 93.39 - 1,400,786 - 15,376,600 

06 Dec 2006 - 57,300 - 95.27 5,458,971 - - 5,823,400 

06 Dec 2006 - - 57,300 93.62 - 5,364,590 - 5,823,400 

08 Dec 2006 - 300 - 83.15 24,945 - - 75,600 

08 Dec 2006 - - 300 83.15 - 24,945 - 75,600 

Total 1,264,400 1,063,400 93,743,926 83,344,429 

Buy – Sale = 201,000 

Conclusion: ALN is a classic day or short term trader. 




No instances of violation were noted. 

97







No violation of law was observed as ALN placed orders and purchased the same. 


Conclusion: No instances of violation were found. 





Name Alishba Naz 

Husband Name Ahsan Ali Farid 

Date of Birth Feb 13, 1983 

CNIC No. 42301-8358332-6 

Family No. O10D84 

Address Faiz Bi Bibi Building, Plot No. RC-4/171, Peru Buddha, Gazoor Abad, Flat No. 7, 

Ranchoor Lane, Karachi 

Details of the nominee from the account opening form of Al-Hoqani Securities are as follows: 

Name of nominee Ehsan Ali Farid 

Father Name Sarwar Ali Azeem 

CNIC No. 42301-7497663-7 

Address Faiz Bi Bibi Building, Plot No. RC-4/171, Pero Budha, Gazoor Abad, Flat No. 7, 

Ranchoor Lane, Karachi 

Conclusion 

No violation of law took place. 

98

5.3.5 ABIDA NASREEN (AN) - Non Group Member: 

Abida Nasreen is a client of First National Equities Limited. AN neither had any outstanding financing 

position on December 08, 2006 nor was seen on the selling side for the period under review. Total share 

position of AN as at December 8, 2006 includes: 




0 0 0 0 0 

5.3.5.1 Trading pattern in the Ready Market 

During the period under review, trading position of the client in Ready Market is as follows: 

Open Buy Sale Avg. Avg. Buy Avg. Sale Financee Market 

Date position CFS Volume Volume Price Value Value Qty. Volume 

27 Nov 2006 - 101,200 2,800 80.00 8,096,000 - - 2,890,300 

28 Nov 2006 - 254,700 - 84.00 21,394,800 - 2,000 7,204,000 

01 Dec 2006 - 1,001,700 263,500 97.20 97,365,240 - 350,000 15,376,600 

Total 1,357,600 266,300 126,856,040 - 

Buy – Sale = 1,091,300 

Conclusion: No evidence that AN was part of Group. Although trading shows, she should have 

position of 1,091,300 shares, there is no such position in CDC. 


Conclusion: No instances found 







While reviewing pre-open session bids and offers data, we observed instances where AN manipulated 


99

applicable. An analysis of Pre-open session has revealed an abnormal trading behavior that has been 

summarized below: 

Total 

Total 

Order 

entered as 

Member Order Qty No. of Orders Queued Market % to Total 

Date Open Close Client Name code Lot orders Qty Price Turnover Market 

Nov 22 65.9 69.15 Abida Nasreen 077 300,000 3 

1,614,700 62% 

100,000 1 1,000,000 69.15 

Nov 27 76.20 80 Abida Nasreen 175 250,000 2 800,000 80 2,890,300 28% 

300,000 1 

Dec 1 92..60 97.20 Abida Nasreen 175 200,000 5 1,000,000 97.20 15,376,600 7% 

Conclusion: Above instances of Nov 22 and Nov 27, 2006 tantamount to market manipulation and 

therefore attracts provisions of S-17e of Securities and Exchange Ordinance 1969. The orders placed on 

Dec 1, 2006 were executed and seemed to be a genuine order placed in pre-open session. 







Name Abida Nasreen 

Husband Name Anwer Ahmed 

Date of Birth Aug 8, 1947 

CNIC No. 17301-4369191-8 

Family No. S95P6D 

Address Phase 2, Hyat Abad, House No. 109, Street No. 10, Sector J-2, Peshawar 

Conclusion 

Based on the observations noted above it is evident that AN, was found violating the securities law by 

manipulating the price of the scrip. By indulging in above referred manipulative and prohibitive 

activities she has violated various law and regulations. 

100

5.3.6 Mohammad Yaseen (MY) - Non Group Member: 

Mohammad Yaseen is a client of Muhammad Ayub Younus Securities (Pvt.) Limited. MY had no 

outstanding share position by December 08, 2006. Total share position of MY as at December 8, 2006 

includes: 

Shares in Shares Shares placed under Repo Total Holding % age of total paid 

CDS under CFS Arrangement 

up capital 

0 0 0 0 0 

5.1.15.1 Trading pattern in the Ready Market 

During the period under review, trading position of MY in Ready Market is as follows: 

Open CFS Buy Sale Avg. Avg. Buy Avg. Sale Financee Market 

Date Position Volume Volume Price Value Value Qty. Volume 

07 Nov 2006 - 252,500 - 53.81 13,586,831 - - 6,640,900 

07 Nov 2006 - - 200,000 54.44 - 10,888,545 - 6,640,900 

08 Nov 2006 - 63,100 - 54.47 3,437,280 - - 2,826,900 

08 Nov 2006 - - 70,600 54.76 - 3,866,383 - 2,826,900 

10 Nov 2006 - 47,300 - 53.43 2,527,110 - - 1,109,000 

10 Nov 2006 - - 7,500 53.61 - 402,107 - 1,109,000 

13 Nov 2006 - - 50,000 54.21 - 2,710,417 - 2,838,500 

14 Nov 2006 - - 49,800 55.13 - 2,745,640 - 2,450,900 

15 Nov 2006 - 80,000 - 54.96 4,396,533 - - 2,624,600 

15 Nov 2006 - - 35,500 56.15 - 1,993,467 - 2,624,600 

16 Nov 2006 - - 44,500 55.87 - 2,486,298 - 6,022,600 

20 Nov 2006 - 255,900 - 62.80 16,070,520 - 200,000 690,900 

21 Nov 2006 - 8,800 - 65.90 579,920 - 200,000 586,100 

22 Nov 2006 - 473,300 - 69.15 32,728,695 - 670,000 1,614,700 

28 Nov 2006 - - 500,000 84.00 - 42,000,000 43,000 7,204,000 

29 Nov 2006 - - 60,000 88.20 - 5,292,000 - 10,518,600 

01 Dec 2006 - 200,000 - 90.60 18,119,464 - - 15,376,600 

01 Dec 2006 - - 140,000 97.20 - 13,608,000 - 15,376,600 

04 Dec 2006 - 25,000 - 101.95 2,548,750 - - 15,554,200 

04 Dec 2006 - - 130,000 101.97 - 13,256,518 - 15,554,200 

05 Dec 2006 - 25,000 - 96.90 2,422,500 - - 8,769,500 

06 Dec 2006 - 138,100 - 92.64 12,793,522 - - 5,823,400 

08 Dec 2006 - - 100 83.15 - 8,315 - 75,600 

TOTAL 

Buy – Sale = 281,000 

1,569,000 1,288,000 109,211,125 99,257,690 

Conclusion: Typical day trader. 


101

No wash or circular trades were found. 







While reviewing pre-open session bids and offers data, we observed instances where MY manipulated 

the CTTL shares price by placing bulk quantity orders at upper level price lock. An analysis of Pre- 

open session has revealed an abnormal trading behavior that has been summarized below: 

Member Buy/ 

Date Open Close code Sale 

Nov 22 65.9 69.15 166 Buy 

Buy 

Buy 

Order 

Qty Lot 

300,000 

200,000 

100,000 

No. of 

orders 

1 

1 

3 

Total 

Total 

Order 

entered as 

Orders Queued Market % to Total 

Qty Price Turnover Market 

800,000 69.15 1,614,700 50% 

Conclusion: Above instances tantamount to market manipulation as MY actually only purchased 

473,000 shares on Nov 22, 2006 at the rate of Rs. 69.15 and the balance order was cancelled. 


Conclusion: No instances were found where MY was involved in Pumping and Dumping. 



General Information 


Name: Muhammad Yaseen 

Father Name: Hassan Noor Muhammad 

Date of Birth: 1950 

CNIC No: 42301-0879042-5 

102

Family No: LS7R2L 

Address: House No. 14, Nagori Palace, Moosa Lane, Karachi 

Conclusion 

Based on the observations noted above it is evident that MY was not violating the securities law in any 

manner except for price manipulation in pre-open. 

103

6 REGULATORY WEAKNESSES OBSERVED AT KSE 

The report also addresses some weaknesses into the existing Risk Management System of KSE, 

and the persons involved in the insider trading, price manipulation and prohibitive practices 

have taken benefit of these weaknesses. 

6.1 INEFFECTIVE ROLE AS FRONT LINE REGULATOR 

During the course of inquiry it has also been observed that Karachi Stock Exchange has not 

played its role as a front line regulator by properly enforcing its rules and regulations and 

taking concrete action when evidence of insider trading and prices manipulation become 

rampant. Further KSE has not taken any proactive action when the Volume of CTTL shares 

under CFS reached 91% of free float of the company stock. 

6.2 ABSENCE OF SPECIAL MARGINS 

The Special Margin under the New Risk Management Regime were implemented from 

December 4, 2006 in a phased manner. However, taking benefit of this aspect, the persons 

involved in market manipulation kept on increasing price of the CTTL until December 4, 2006, 

thereby generating liquidity on the one hand and increasing the value of collateral on the other 

hand as the CCTL shares were bought under leveraged mode. 

This fact is reminiscent of the events of May 2000, when, in addition to various tools employed 

by the market manipulators, one engineered activity was infact the scheme where prices of the 

scrip in which weak buyers had interests, were increased on a daily basis and the resulting 

difference was taken out of the market by the weak buyers through routine settlements. COT 2 

Margin was at that time brought in to curb this market abuse however COT 2 was subsequently 

done away with by the KSE Board. 

While reviewing Callmate Telips Telecommunication Limited (CTTL) case where share prices 

were manipulated during the period November 3, 2006 till first week of December 2006, it 

becomes apparent that number of weak buyers have taken benefit of absence of Special Margin 

during that period. Even though presently the special Margins have been implemented since 

December 4, 2006, only 50% of the required margin is being collected under the phased wise 

plan as agreed with the market Participants. We believe that if special margins would have 

implemented at once as planned earlier by the SECP, than the persons behind the manipulation 

104

of the CTTL would not have been able to generate liquidity by way of increasing price of the 

scrip on a daily basis with such great ease. 

6.3 EXCESS QUANTITY OF CTTL SHARES ACCEPTED BY CLEARING HOUSE 

KSE did not implement the following position limits w.e.f. Dec 4, 2006 namely: 

• 1.0% of free float per client 

• 5.0% of free float per member 

• 40.0% of free float for CFS market 

Further the limit of shares acceptable as collateral i.e. 0.5% of free float per member was not 

implemented. It was interesting to note that CCTL vide its letter dated August 9, 2006 had 

provided KSE with information about the free float of the company. Data relating to CCTL scrip 

accepted as collateral by the KSE Clearing house depicted instances where even 900,000 shares 

of CTTL shares were accepted, which was around 2% of the free float of CTTL. 

6.4 CFS MARKET REGULATION WERE NOT IMPLEMENTED 

Instances have been observed when OIBsold 750,000 of CTTL shares in CFS market on behalf of 

its client Mr. Nadeem Ahmed Khan, member of the Group, despite the fact that Mr. Khan had 

no position in the ready market on that day. CFS facilty is only available against ready market 

purchases, however above mentioned activity suggest that CFS market was used to refinance 

earlier purchases. Thus defeating the entire rationale of the CFS market. We believe that KSE 

system should not have allowed these activities. 

6.5 ISSUES WITH UNIVERSAL IDENTIFICATION SYSTEM (UIN) 

Presently those clients who are trading at KSE by placing their orders through the members of 

LSE and ISE , are not identified through UIN as brokers of LSE and ISE use their own UIN code 

(only suffix / is added to identify the client trading). Due to this practice, our investigation was 

largely hampered and therefore it is possible that other persons who have been involved in the 

non-compliances of the relevant regulatory framework would escape from writ of law. 

105

6.6 Change in client codes 

On Nov 29, 2006 Mr. Asim Fayyaz Qureshi bought 5,844,500 shares from Orix Investment Bank. 

In order to avoid the disclosure as required under Listed Companies (Substantial Acquisition of 

voting shares and takeovers) Ordinance, 2002, the buying of AFQ was broken between 

Muhammad Ajmal Ansari (2,944,500 shares) and Asim Fayyaz Qureshi (2,900,000 shares). ORIX 

Investment bank, informed KSE management about transfer of AFQ buying to MAA, however, 

KSE, despite huge transactions, failed to take any concrete action over it. 

Likewise, as per the records submitted by the First National Equities Limited, it appears that 

brokerage house intimated KSE huge volume of trade correction in CTTL trades through its 

letters dated November 27, 2006, Nov 28, 2006 and Dec 1, 2006, but KSE failed to take any notice 

of such unusual information. 

In another instance, FNEL through its letter dated Nov 22, 2006 submitted information to KSE 

Deputy Manager Trading Affairs, about Client to client of 1,275,000 shares involving OIBand 

FNEL. 

Despite such big volume being transacted through C to C and reported to KSE, appropriate 

regulatory measures were not taken in time. 

6.7 Roll over of CFS on daily basis 

We noted that KSE allowed CFS shares to be rolled over on a daily basis thereby allowing the 

financees to extract profits where the market is going up at the expense of the financier. 

6.8 Naked Roll over of CFS 

We noted that financees were being exempt from applicable margin in those cases where CFS 

open positions were released and rolled over on daily basis. Due to this practice, KSE by 

allowing it caused the clearing hosue to be exposed. 

106

CTTL Market Rates and turnover during the period Nov 1, 2006 to Dec 8, 2006. 

Rates Net %age Upper/ 

Date Open High Low Close Change Change Lower Lock Turnover 

1-Nov-06 49.35 49 46.9 46.9 -2.45 -4.96% Lower lock 1,141,300 

2-Nov-06 46.9 47.95 46.35 47.5 0.6 1.28% 709,500 

3-Nov-06 47.5 49.85 48.35 49.85 2.35 4.95% Upper lock 818,000 

6-Nov-06 49.85 52.3 52.3 52.3 2.45 4.91% Upper lock 488,100 

7-Nov-06 52.3 54.9 50.2 54.9 2.6 4.97% Upper lock 6,640,900 

8-Nov-06 54.9 56 53.5 54.5 -0.4 -0.73% 2,826,900 

10-Nov-06 54.5 54 52.1 53.3 -1.2 -2.20% 1,109,000 

13-Nov-06 53.3 54.5 51 53.8 0.5 0.94% 2,838,500 

14-Nov-06 53.8 56 53.2 55.95 2.15 4.00% 2,450,900 

15-Nov-06 55.95 56.35 54.25 55.4 -0.55 -0.98% 2,624,600 

16-Nov-06 55.4 57.45 54.05 57 1.6 2.89% 6,022,600 

17-Nov-06 57 59.85 56.9 59.85 2.85 5.00% Upper lock 12,585,300 

20-Nov-06 59.85 62.8 62.8 62.8 2.95 4.93% Upper lock 690,900 

21-Nov-06 62.8 65.9 65.9 65.9 3.1 4.94% Upper lock 586,100 

22-Nov-06 65.9 69.15 69.15 69.15 3.25 4.93% Upper lock 1,614,700 

23-Nov-06 69.15 72.6 72.6 72.6 3.45 4.99% Upper lock 1,996,800 

24-Nov-06 72.6 76.2 76.2 76.2 3.6 4.96% Upper lock 1,839,500 

27-Nov-06 76.2 80 80 80 3.8 4.99% Upper lock 2,890,300 

28-Nov-06 80 84 84 84 4 5.00% Upper lock 7,204,000 

29-Nov-06 84 88.2 79.8 88.2 4.2 5.00% Upper lock 10,518,600 

30-Nov-06 88.2 92.6 92.6 92.6 4.4 5.00% Upper lock 4,568,500 

1-Dec-06 92.6 97.2 88 97.2 4.6 4.97% Upper lock 15,376,600 

4-Dec-06 97.2 102.05 95.2 101.95 4.75 4.89% 15,554,200 

5-Dec-06 101.95 103.7 96.9 96.9 -5.05 -4.95% Lower lock 8,769,500 

6-Dec-06 96.9 96 92.1 92.1 -4.8 -4.95% Lower lock 5,823,400 

7-Dec-06 92.1 87.5 87.5 87.5 -4.6 -4.99% Lower lock 322,700 

8-Dec-06 87.5 83.15 83.15 83.15 -4.35 -4.97% Lower lock 75,600 

ANNEXURE 1 

107

ANNEXURE 2 

Following tables present positions of top 20 buyer Members and Seller Members during the period 

under review: 

Member 

Buy % Contribution 

Code Member Name Buy Qty Transactions to Market 

175 First National Equities Ltd. 24,829,300 6,487 26 

77 OIB(Pak) Ltd 23,654,300 4,970 25 

110 Al-Hoqani Sec. & Inv. Cor. (Pv 11,234,800 3,293 12 

105 Shahid Ali Habib Securities (P 8,382,400 1,508 9 

198 Motiwala Securities (Pvt.) Ltd 4,099,700 326 4 

166 Amin Siddiq Parekh Sec.(Pvt.)L 2,623,000 3,758 3 

104 Moosa Noor Mohammed Shahzada & 2,596,400 523 3 

6 Sherman Securities (Pvt.) Ltd. 2,510,200 914 3 

57 First Capital Equities Ltd. 2,187,300 1,280 2 

58 Mohammed Ayub Younus Adhi 2,173,000 256 2 

12 Noman Abid & Co 1,573,600 397 2 

97 Invest Capital and Sec 1,490,700 333 2 

128 KASB 1,317,800 1,868 1 

67 ACE Sec 1,275,300 1,779 1 

7 Eastern Capital 1,219,400 1,772 1 

43 Live Sec 1,157,800 1,138 1 

84 M. Munir Khanani 1,141,600 991 1 

194 M.R.A Sec 988,000 950 1 

90 Darson Sec 819,000 535 1 

98 Mohammed Hussain Adhi 732,800 304 1 

Member 

Sold % Contribution 

Code Member Name Sold Qty Transactions to Market 

77 OIB(Pak) Ltd 20,171,700 2,580 25 

110 Al-Hoqani Sec. & Inv. Cor. (Pv 12,073,800 1,803 15 

175 First National Equities Ltd. 11,433,500 2,433 14 

57 First Capital Equities Ltd. 6,746,900 3,805 8 

128 KASB Securities Ltd. 2,980,500 2,534 4 

6 Sherman Securities (Pvt.) Ltd. 2,844,800 718 4 

200 Ali Husain Rajabali Limited 2,472,500 1,898 3 

166 Amin Siddiq Parekh Sec.(Pvt.)L 2,431,300 664 3 

142 Foundation Securities (Pvt.) L 1,967,300 251 2 

43 Live Securities (Private) Ltd. 1,961,700 1,397 2 

67 ACE Sec 1,921,900 1,557 2 

97 Invest Capital Sec 1,879,500 350 2 

149 Jahangir Siddiqui Cap. Markets 1,803,600 487 2 

90 Darson Sec 1,683,400 781 2 

7 Eastern Capital 1,673,600 2,063 2 

84 M. Munir Khanani 1,635,800 1,302 2 

50 Arif Habib Ltd 1,569,400 273 2 

105 Shahid Ali Habib Sec 1,339,300 232 2 

194 M.R.A Sec 1,166,100 567 1 

114 Amin Tai Sec 1,052,300 160 1 

108

ANNEXURE 3 

Table showing daily CFS position of CTTL during the period Nov 6, 2006 to December 8, 2006. 

Unreleased Open Total CFS 

Qty in Value in Qty in Value in 

Date Mln. Bln. Mln. Bln. Qty in Mln. Value in Bln. 

6-Nov-06 0.00 0.00 0.12 0.01 0.12 0.01 

7-Nov-06 0.01 0.00 1.60 0.09 1.60 0.09 

8-Nov-06 0.94 0.05 1.44 0.08 2.38 0.13 

10-Nov-06 0.29 0.02 2.13 0.11 2.42 0.13 

13-Nov-06 1.66 0.09 2.64 0.14 4.30 0.23 

14-Nov-06 3.13 0.17 1.50 0.08 4.63 0.25 

15-Nov-06 3.05 0.16 1.82 0.10 4.88 0.26 

16-Nov-06 3.10 0.17 4.22 0.24 7.33 0.41 

17-Nov-06 5.26 0.29 8.62 0.52 13.88 0.81 

20-Nov-06 12.60 0.73 1.62 0.10 14.23 0.83 

21-Nov-06 12.72 0.74 1.58 0.10 14.30 0.84 

22-Nov-06 11.13 0.65 2.66 0.18 13.78 0.83 

23-Nov-06 12.22 0.72 2.58 0.19 14.79 0.91 

24-Nov-06 10.68 0.65 2.52 0.19 13.19 0.84 

27-Nov-06 10.29 0.64 5.38 0.43 15.66 1.07 

28-Nov-06 12.26 0.84 8.02 0.67 20.28 1.51 

29-Nov-06 15.85 1.15 10.97 0.97 26.82 2.12 

30-Nov-06 18.58 1.49 10.50 0.97 29.08 2.46 

1-Dec-06 25.82 2.17 8.95 0.87 34.77 3.04 

4-Dec-06 23.49 2.05 11.25 1.15 34.74 3.19 

5-Dec-06 23.99 2.17 10.29 1.00 34.28 3.17 

6-Dec-06 31.79 2.92 6.20 0.57 37.99 3.49 

7-Dec-06 35.24 3.23 1.12 0.10 36.36 3.33 

8-Dec-06 35.56 3.26 0.01 0.00 35.56 3.26 

109

List of top Financees and Financiers in CTTL as on Dec 8, 2006 

ANNEXURE 4 

S. Top 10 Financees Top 10 Financiers 

No. Name Quantity Value Name Quantity Value 

1 First National Eq. 12,663,200 1,111,943,525KASB Securities Ltd 7,094,800 688,787,805 

2 Shahid Ali Habib 6,618,500 666,604,870First National Eq. 5,457,300 462,225,080 

3 Orix Inv. Bank 7,085,200 578,807,580Orix Inv. Bank 4,965,300 427,138,225 

4 Motiwala Sec. 3,925,000 385,214,975Escorts Investment Bank Ltd. 2,789,900 257,324,510 

5 Younis Aadhi 1,880,000 181,574,800BMA Capital Management Ltd. 2,255,300 199,444,200 

6 Al-Hoqani Sec. 1,500,000 152,925,000Live Securities (Pvt.) Ltd. 1,430,400 131,493,270 

7 Standard Capital 1,258,100 120,675,810Standard Capital 1,192,400 114,917,850 

8 Muhammad Hussain Adhi 123,500 11,353,875Invest & Finance Securities 1,020,100 98,373,445 

9 Muhammad Anas Kapadia 119,400 10,953,500Firozuddin A. Casim 1,197,100 97,908,220 

10 FDM Capital Securities 92,000 8,050,000Younis Aadhi 1,039,700 97,586,050 

110

Shareholding status as per the last published accounts (June 30, 2005) 

ANNEXURE 5 

Particulars Shareholders Shareholding % age 

Directors, CEO and their Spouse & minor children (Name 

wise detail) 

Mr. Ahmed Jamil Ansari- Chairman 1 11,706,100 23.2944 

Mr. Mohammad Ajmal Ansari-Chief Executive 1 1,717,790 3.4183 

Mr. Hasan Jamil Ansari 1 4,197,590 8.3529 

Mrs. Yuba Jamil Ansari 1 2,085,524 4.1500 

Mrs. Maria Jamil Ansari 1 500 0.0010 

Mrs. Nuzhat Ikramullah 1 250 0.0005 

Mr. Abu Shamim M. Ariff 1 250 0.0005 

Associated Company 

Interglobe Commerce Pakistan (Pvt) Limited 1 8,050,000 16.0190 

Total Ansari Family 55.2366% 

NIT & ICP 1 160,000 0.3183 

Banks, DFI & NBFI 10 5,359,060 10.6642 

Insurance Companies 1 65,000 0.1293 

General Public (Local) 2677 10,146,036 20.1900 

Modarabas & Mutual Funds 3 1,770,000 3.5222 

Others 63 4,994,700 9.9391 

Company Total 2763 50,252,800 100.0000% 

111

ANNEXURE 6 

List of Directors and officials of the Company as at June 30, 2005 and January 5, 2007 is given below: 

STATUS AS AT JUNE 30, 2005 




Yuba Jamil Ansari 

Maria Jamil Ansari 

Abu Shamim Muhammad Ariff 




Chief Accountant 

Mr. Imran Mehmood 

Secretary 

S.M. Mehbob 

Legal Advisor 

Ahmed Adnan & Qazi Associates 

STATUS AS AT JANUARY 5, 2007 





M. Imran Mehmood 

General (Rtd.) Safdar Ali Khan 

M. Tariq Rangoonwala 

Mr. Nadeem Ahmed 

112

ANNEXURE 7 

113

114

ANNEXURE 8 

Given below are two tables A and B each showing top 20 Buyer and seller Clients respectively in term of 

turnover for the period November 7, 2006 to December 8, 2006 

Table A showing top 20 Buyer Clients 

Client 

Code Client Name Member Name Buy Qty 

Avg. Buy 

Rate 

% Contrib. 

to Market 

FP First Pakistan Securities Ltd First National Equities Limited 

Al-Hoqani Securities & Investment 

10,734,800 73.80 14 

3 Irfan Mehmood Corporation 10,322,000 87.98 14 

MAA Muhammad Ajmal Ansari OIBPakistan Limited 10,073,500 80.53 13 

AFQ Asim Fayyaz Qureshi OIBPakistan Limited 9,059,500 84.66 12 

525 Asim Fayaz Qureshi First National Equities Limited 6,954,800 91.81 9 

415 Naveed Haider Bukhari Shahid Ali Habib Securities (Pvt.) Limited 6,574,500 101.61 9 

2220 Mohammad Aqeel Motiwala Securities (Pvt.) Ltd 4,000,000 98.29 5 

5159 Muhammad Hassan Moosa, Noor Mohammed, Shahzada & Co. 2,400,000 102.04 3 

309 First Dawood Inv Bank M. Ayub Younis Aadhi 1,752,000 98.20 2 

5 Muhammad Yaseen Amin Siddiq Parekh 1,624,100 69.43 2 

1577 Noman Abid & Company 1,500,000 100.20 2 

414 Junaid Habib Shahid Ali Habib Securities (Pvt.) Limited 1,500,000 97.19 2 

487 M Ashraf Khan First National Equities Limited 1,441,700 53.69 2 

AFK Mohammed Ashraf Khan OIBPakistan Limited 1,362,000 55.01 2 

P190 Abida Nasreen First National Equities Limited 1,357,600 93.44 2 

AN Alishba Naz First National Equities Limited 1,264,400 74.32 2 

9335 Habib Un Nisa Sherman Securities (Pvt.) Limited 

Al-Hoqani Securities & Investment 

1,262,300 62.11 2 

30 Huma Younus Corporation 690,800 94.20 1 

NL Nadeem Ahmed Khan OIBPakistan Limited 615,900 63.16 1 

9836 Mr. Mirza Usman Baig Sherman Securities (Pvt.) Limited 613,900 56.97 1 

115

Table B, presenting top 20 Seller Clients 

Client 

Code Client Name Member Name Sold Qty 

Average 

Sale Rate 

% Contrib. 

to Market 

3 Irfan Mehmood Al-Hoqani Securities & Investment 10,589,800 71.69 23 

MAA Muhammad Ajmal Ansari OIBPakistan Limited 7,139,400 92.81 15 

AFQ Asim Fayyaz Qureshi OIBPakistan Limited 5,212,000 101.98 11 

FP 

First Pakistan Securities 

Limited First National Equities Limited 3,573,800 99.96 8 

111043 Naved Bukhari First Capital Equities Limited 2,000,000 84.00 4 

B 

SP 

First Pakistan Securities 

Limited OIBPakistan Limited 1,784,000 86.77 4 

The Saudi Pak Indust. & Agrit. 

Invest. Company (Pvt) Ltd. OIBPakistan Limited 1,762,000 73.24 4 

369 Muhammed Hisar Ansari Foundation Securities (Private) Limited 1,526,300 95.73 3 

525 Asim Fayaz Qureshi First National Equities Limited 1,452,000 99.03 3 

5 Muhammad Yaseen Amin Siddiq Parekh 1,426,100 76.09 3 

9335 Habib Un Nisa Sherman Securities (Pvt.) Limited 1,350,800 66.59 3 

210011 Suleman Saeed Al-Hoqani First Capital Equities Limited 1,126,000 68.37 2 

810500 Asim Mehmood First Capital Equities Limited 1,101,000 79.84 2 

AN Alishba Naz First National Equities Limited 1,073,400 78.47 2 

555 The Bank Of Khyber OIBPakistan Limited 1,058,200 93.09 2 

415 Naveed Haider Bukhari Shahid Ali Habib Securities (Pvt.) Ltd. 1,001,100 92.59 2 

AB Pak-Oman Investment Co Ltd OIBPakistan Limited 1,001,000 97.19 2 

CC0640 Arif Habib Securities Arif Habib Limited 977,500 93.75 2 

5211 Nabila Qadir Dalal Securities Limited 696,600 71.02 2 

74 Orix Investments Bank Pak LtdOIBPakistan Limited 688,200 97.33 1 

116

PRE-OPEN SESSION ANALYSIS 

ANNEXURE 9 

While analyzing Pre-order order level data, instances were found where it appears that price of the 

scrip may have been influenced by the identified Clients by putting orders in bulk quantities at upper 

and lower locks on various trading days. Following are some instances: 

Total 

Total 

Order Qty No. of Orders Buy/ Queued Market 

Date Open Close Client Name 

Lot orders Qty Sale Price Turnover 

8-Dec 87.5 83.15 Naveed Haider Bukhari 250,000 10 22,500,000 Sale 83.15 75,600 

7-Dec 92.1 87.5 M. Ashraf Khan 250,000 6 1,500,000 Sale 87.5 322,,700 

7-Dec 92.1 87.5 First National Eq. Ltd 250,000 8 2,000,000 Sale 87.5 322,700 

7-Dec 92.1 87.5 First Pakistan Sec Ltd A/c 

IM 

4-Dec 97.2 101.95 Irfan Mehmood 

200,000 10 2,000,000 Sale 87.5 322,700 

200,000 7 Buy 

100,000 1 1,500,000 Buy 

102.5 15,554,200 

4-Dec 97.2 101.95 Naveed Haider Bukhari 200,000 16 3,200,000 Buy 102.5 15,554,000 

4-Dec 97.2 101.95 First Pakistan Sec Ltd A/c 

IM 

100,000 3 300,000 Buy 

200,000 8 1,600,000 Buy 102.05 

15,554,000 

1-Dec 92..60 97.2 Irfan Mehmood 200,000 10 2,000,000 Buy 97.2 15,376,600 

1-Dec 92..60 97.2 Asim Fayyaz Qureshi 200,000 8 1,600,000 Buy 97.2 15,376,600 

1-Dec 92..60 97.2 First Pakistan Sec Ltd A/c 

IM 

200,000 7 1,400,000 Buy 97.2 15,376,600 

1-Dec 92..60 97.2 Abida Nasreen 200,000 5 1,000,000 Buy 97.2 15,376,600 

30-Nov 88.2 92.6 Irfan Mehmood 200,000 10 2,000,000 Buy 92.6 4,568,500 

30-Nov 88.2 92.6 Asim Fayyaz Qureshi 200,000 5 1,000,000 Buy 92.6 4,568,500 

30-Nov 88.2 92.6 First Pakistan Sec Ltd A/C 

IM 

200,000 9 1,800,000 Buy 

125,000 1 125,000 Buy 

92.6 4,568,500 

29-Nov 84 88.2 Irfan Mehmood 250,000 1 250,000 Buy 88.2 10,518,600 

29-Nov 84 88.2 Asim Fayyaz Qureshi 200,000 10 2,000,000 Buy 79.8 10,518,600 

29-Nov 84 88.2 Alishba Naz 300,000 2 600,000 Buy 80-81 10,518,600 

28-Nov 80 84 Irfan Mehmood 250,000 13 3,250,000 Buy 84 7,204,000 

27-Nov 76.2 80 Irfan Mehmood 300,000 10 3,000,000 Buy 80 2,890,300 

27-Nov 76.2 80 First Pakistan Sec Ltd A/c 

IM 

27-Nov 76.2 80 Abida Nasreen 

300,000 7 2,100,000 Buy 

100,000 1 100,000 Buy 80 

250,000 2 800,000 Buy 

300,000 1 

Buy 

2,890,300 

80 2,890,300 


24-Nov 72.6 76.2 Asim Mehmood 200,000 2 400,000 Buy 76.2 1,839,500 

24-Nov 72.6 76.2 Habib-un-Nisa 250,000 2 500,000 Buy 76.2 1,839,500 

117

24-Nov 72.6 76.2 First Pakistan Sec Ltd A/C 

IM 

300,000 8 2,400,000 Buy 76.2 1,839,500 


22-Nov 65.9 69.15 Muhammad Yasin 

22-Nov 65.9 69.15 Abida Nasreen 

300,000 1 Buy 

200,000 1 Buy 

100,000 3 800,000 Buy 69.15 

300,000 3 Buy 

100,000 1 1,000,000 Buy 69.15 

1,614,700 

1,614,700 

21-Nov 62.8 65.9 Irfan Mehmood 250,000 12 3,000,000 Buy 65.9 586,100 

17-Nov 57 59.85 Irfan Mehmood 250,000 1 250,000 Buy 58.9 12,585,300 

118

ANNEXURE 11 

Relevant text of the various laws is given hereunder where we have prima facie evidence that potential 

violation of various laws including but not limited to the following, took place: 


• Securities and Exchange Ordinance 1969, Section 15A- Prohibition on stock exchange deals 

by insiders 

“No person who is, or has been, at any time during the preceding six months, associated with a 

company shall, directly or indirectly, deal on a stock exchange in any listed securities of that or any 

other company or cause any other person to deal in securities of such company, if he has information 

which- 

a) is not generally available; 

b) would, if it were so available, be likely to materially affect the price of those securities; or 

c) relates to any transaction (actual or contemplated) involving such company. 

Explanation.- For the purpose of this section, the expression “associated with” shall mean a 

person associated with a company, if he- 

(i) is an officer or employee of that company or an associated company; or 

(ii) occupies a position which gives him access thereto by reason of any professional or 

business relationship between him or his employer or a company or associated company 

of which he is a director.” 

• Listed companies (Prohibition of Insiders Trading Guidelines, Guideline), Clause 3- 

Prohibition on dealing, communicating or counseling by insiders 

“No person who is or has been, at any time during the preceding six months associated with a 

company shall: 

i. either on his own behalf or on behalf of any other person, deal in securities of a company listed 

on a stock exchange on the basis of any unpublished price sensitive information; or 

ii. communicate any unpublished price sensitive information to any person, with or without his 

request for such information, except as required in the ordinary course of business or under 

any law; or 

iii. counsel or procure any other person to deal in securities of any company on the basis of 

unpublished price sensitive information.” 



119

“No person shall, for the purpose of inducing, dissuading, effecting, preventing or in any manner 

influencing or turning to his advantage, the sale or purchase of any security, directly or indirectly,- 

(e) do any act or practice or engage in a course of business, or omit to do any act which operates or 

would operate as a fraud, deceit or manipulation upon any person, in particular- 

(i) make any fictitious quotation; 

(ii) create a false and misleading appearance of active trading in any security; 

(iii) effect any transaction in such security which involves no change in its beneficial ownership; 

(iv) enter into an order or orders for the purchase and sale of security which will ultimately 

cancelout each other and will not result in any change in the beneficial ownership of such security; 

(v) directly or indirectly effect a series of transactions in any security creating the appearance of 

active trading therein or of raising of price for the purpose of inducing its purchase by others or 

depressing its price for 

the purpose of inducing its sale by others; 

(vi) being a director or an officer of the issuer of a listed equity security or a beneficial owner of not 

less than ten per cent of such security who is in possession of material facts omit to disclose any 

such facts while buying or selling such security. 


• Listed Companies (Substantial Acquisitions of voting shares and takeovers) Ord, 2002- 

Section-4, Acquisition of more than ten percent voting shares of a company. 

“(1) Any acquirer who acquires voting shares, which (taken together with voting shares, if any, 

held by the acquirer) would entitle the acquirer to more than ten per cent voting shares in a listed 

company, shall disclose the aggregate of his shareholding in that company to the said company and 

to the stock exchange on which the voting shares of the said company are listed as provided in subsection 

(2).” 

And Section-5, Additional acquisition of voting shares 

“ (1) No person shall, directly or indirectly, acquire— 

a) voting shares, which (taken together with voting shares, if any, held by such person) would 

entitle such person to more than twenty five per cent voting shares in a listed company; or 

b) control of a listed company, 

unless such person makes a public announcement of offer to acquire voting shares or control of 

such company in accordance with this Ordinance. 

(2) Before making announcement under sub-section (1), such person shall make disclosure in the 

manner specified in section 4.” 

iv) Companies Ordinance 1984- S-222 Submission of statements of beneficial owners of listed 

securities, and S-224 Trading by directors, officers and principal shareholders. 

120

Section 222 (c) of the Companies Ordinance provides that every director, chief executive, company 


company shall submit to the registrar and the Commission a return of beneficial ownership on 

Form-32 for change in its shareholding, within 15 days of the change. 

Section 224(1) provides that where any director, chief executive …. beneficial owner of more than 

ten percent….. make any gains by the purchase and sales, or the sale and purchase,…. with in a 

period of less than six months…. shall make a report and tender the amount of such gain to the 

company and simulateneously sensd and intimation to this effect to the registrar and the 

Commission. 

vi) Broker acted in collusion with the clients to manipulate the price, undertook market 


of CTTL. 

• Brokers and Agents Registration Rules, 2001- R-12 Brokers to abide by code of conduct 

which specifically states that they shall not violate any law of the land. 

A broker holding a certificate of registeration under these rules shall abilde by the code of conduct 

specified in the Third Schedule. 

iii) KSE Regulations with respect to Short Selling under Ready Market 2002, KATS Regulations 

and General Rules & Regulations of KSE 

17(a) of KATS Regulations states – “A member shall be responsible for all orders entered from his 

trading workstation(s).” 

121

MOHAMMAD AJMAL ANSARI 

Annexure 10A

MOHAMMAD AJMAL ANSARI 

Annexure 10A

ASIM FAYYAZ QUERSHI 

Annexure 10B

NAVEED HAIDER BUKHARI 

Annexure 10C

NAVEED HAIDER BUKHARI 

Annexure 10C

MUHAMMAD ASHRAF KHAN 

Annexure 10D

IRFAN MAHMOOD 

Annexure 10E

IRFAN MAHMOOD 

Annexure 10E

FIRST PAKISTAN SECURITIES LIMITED 

Annexure 10F

FIRST PAKISTAN SECURITIES LIMITED 

Annexure 10F

MUHAMMAD HASSAN 

Annexure 10G

JUNAID HABIB 

Annexure 10H

ANNEXURE 11 

Relevant text of the various laws is given hereunder where we have prima facie evidence that potential 

violation of various laws including but not limited to the following, took place: 


• Securities and Exchange Ordinance 1969, Section 15A- Prohibition on stock exchange deals 

by insiders 

“No person who is, or has been, at any time during the preceding six months, associated with a 

company shall, directly or indirectly, deal on a stock exchange in any listed securities of that or any 

other company or cause any other person to deal in securities of such company, if he has information 

which- 

a) is not generally available; 

b) would, if it were so available, be likely to materially affect the price of those securities; or 

c) relates to any transaction (actual or contemplated) involving such company. 

Explanation.- For the purpose of this section, the expression “associated with” shall mean a 

person associated with a company, if he- 

(i) is an officer or employee of that company or an associated company; or 

(ii) occupies a position which gives him access thereto by reason of any professional or 

business relationship between him or his employer or a company or associated company 

of which he is a director.” 

• Listed companies (Prohibition of Insiders Trading Guidelines, Guideline), Clause 3- 

Prohibition on dealing, communicating or counseling by insiders 

“No person who is or has been, at any time during the preceding six months associated with a 

company shall: 

i. either on his own behalf or on behalf of any other person, deal in securities of a company listed 

on a stock exchange on the basis of any unpublished price sensitive information; or 

ii. communicate any unpublished price sensitive information to any person, with or without his 

request for such information, except as required in the ordinary course of business or under 

any law; or 

iii. counsel or procure any other person to deal in securities of any company on the basis of 

unpublished price sensitive information.” 



1

“No person shall, for the purpose of inducing, dissuading, effecting, preventing or in any manner 

influencing or turning to his advantage, the sale or purchase of any security, directly or indirectly,- 

(e) do any act or practice or engage in a course of business, or omit to do any act which operates or 

would operate as a fraud, deceit or manipulation upon any person, in particular- 

(i) make any fictitious quotation; 

(ii) create a false and misleading appearance of active trading in any security; 

(iii) effect any transaction in such security which involves no change in its beneficial ownership; 

(iv) enter into an order or orders for the purchase and sale of security which will ultimately 

cancelout each other and will not result in any change in the beneficial ownership of such security; 

(v) directly or indirectly effect a series of transactions in any security creating the appearance of 

active trading therein or of raising of price for the purpose of inducing its purchase by others or 

depressing its price for 

the purpose of inducing its sale by others; 

(vi) being a director or an officer of the issuer of a listed equity security or a beneficial owner of not 

less than ten per cent of such security who is in possession of material facts omit to disclose any 

such facts while buying or selling such security. 


• Listed Companies (Substantial Acquisitions of voting shares and takeovers) Ord, 2002- 

Section-4, Acquisition of more than ten percent voting shares of a company. 

“(1) Any acquirer who acquires voting shares, which (taken together with voting shares, if any, 

held by the acquirer) would entitle the acquirer to more than ten per cent voting shares in a listed 

company, shall disclose the aggregate of his shareholding in that company to the said company and 

to the stock exchange on which the voting shares of the said company are listed as provided in subsection 

(2).” 

And Section-5, Additional acquisition of voting shares 

“ (1) No person shall, directly or indirectly, acquire— 

a) voting shares, which (taken together with voting shares, if any, held by such person) would 

entitle such person to more than twenty five per cent voting shares in a listed company; or 

b) control of a listed company, 

unless such person makes a public announcement of offer to acquire voting shares or control of 

such company in accordance with this Ordinance. 

(2) Before making announcement under sub-section (1), such person shall make disclosure in the 

manner specified in section 4.” 

iv) Companies Ordinance 1984- S-222 Submission of statements of beneficial owners of listed 

securities, and S-224 Trading by directors, officers and principal shareholders. 

2

Section 222 (c) of the Companies Ordinance provides that every director, chief executive, company 


company shall submit to the registrar and the Commission a return of beneficial ownership on 

Form-32 for change in its shareholding, within 15 days of the change. 

Section 224(1) provides that where any director, chief executive …. beneficial owner of more than 

ten percent….. make any gains by the purchase and sales, or the sale and purchase,…. with in a 

period of less than six months…. shall make a report and tender the amount of such gain to the 

company and simulateneously sensd and intimation to this effect to the registrar and the 

Commission. 

v) Broker acted in collusion with the clients to manipulate the price, undertook market 


of CTTL. 

• Brokers and Agents Registration Rules, 2001- R-12 Brokers to abide by code of conduct 

which specifically states that they shall not violate any law of the land. 

A broker holding a certificate of registeration under these rules shall abilde by the code of conduct 

specified in the Third Schedule. 

iii) KSE Regulations with respect to Short Selling under Ready Market 2002, KATS Regulations 

and General Rules & Regulations of KSE 

17(a) of KATS Regulations states – “A member shall be responsible for all orders entered from his 

trading workstation(s).” 

3

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