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ADB satisfied withcompliance ofcapital marketloan conditionsRECORDER REPORT

KARACHI: The Asian Development Bank (ADB) delegation has expressed its satisfaction over the status of compliance of various conditions in the context of capital market development programme loan in Pakistan.

The ADB in 1998 approved loan worth $250 million under capital market development programme fund, of which Pakistan has received $125 million. The conditions linked to this programme were the hiring of managing directors and seven directors in the board of the Karachi Stock Exchange (KSE). Furthermore, some amendments have been made in the Companies Ordinance, and the Corporate Law Authority has been replaced with Securities Exchange Commission of Pakistan. This entity too has outside directors especially from the private sector and institutes of professional studies like those of chartered accountants, cost management accountants and business administration.

A delegation of ADB headed by Werner E. Liepach, Senior Financial Economist accompanied by Randolph N. Earman, Jr. Senior Public private sector specialist and Ms. Esperanza P. Clave, Private Sector Department visited the KSE for a meeting with its chairman Arif Habib. Vice Chairman, Saleem Chamdia and General Manager Mohammad Yacoob Memon were also present in the meeting.

The ADB officials were briefed about the status of compliance of conditions affecting the improvement of stock exchanges corporate governance, including reorganisation of management of board, conferring self-regulatory status of stock exchanges, introduction of fully-automated trading and operations of CDC, etc.

Their attention was also drawn to the problem faced by the KSE in the matter of taxability of clearing house/investors protection fund and tax on capital gains on conversion of Corporate Membership.

The ADB officials were fully satisfied with the status of compliance and assured their all possible help and assistance in the matter of allowing tax exemptions on clearing house/Investors Protection Fund and capital gains on conversion of Corporate Membership.