SECP buries Rs 41 billion scandal in silence

Watchdog chiefs accused of shielding irregularities
ISLAMABAD
Investigations into Rs41 billion worth of irregularities at the Securities and Exchange Commission of Pakistan (SECP) are losing momentum, sparking unease among the public and business community over the weakening of accountability. Despite the exposure of massive financial violations, neither has the regulator’s authority to fix its own salaries been withdrawn, nor has any recovery of illegal payouts been initiated, raising concerns about institutional impunity.
The Auditor General of Pakistan’s 2024–25 report disclosed that SECP Chairman Akif Saeed received Rs41.53 million in salary during FY2023–24, while each commissioner drew Rs35.8 million. These pay hikes, some backdated by 18 months, were approved without authorization from the Ministry of Finance. Auditors noted that the move directly contravened the Public Finance Management Act 2019 and undermined SECP’s claim that such decisions were taken with consensus.
The report further found that, beyond commissioners, SECP officials collectively received Rs156.6 million in unauthorized salaries and perks. An additional Rs110.9 million was disbursed under a “Rest and Recreation Allowance,” despite no legal provision for such payments. SECP formally challenged the audit findings, but its justification was dismissed as weak and unconvincing.
In response, the Senate Finance Committee recommended stripping SECP of its salary-setting powers. The Public Accounts Committee also launched a parallel review, expressing alarm over the scale of irregularities. Senators highlighted inflated monthly compensation exceeding Rs14 million for select officials. They warned that such practices damaged parliamentary trust in the regulator.
Beyond inflated salaries, the audit revealed systemic financial mismanagement. SECP withheld Rs14 billion in revenues, including Rs7.1 billion in licensing and corporate fees that were never deposited into the Federal Consolidated Fund. A further Rs6.99 billion in surplus income was retained without approval, bringing total unaccounted sums close to Rs41 billion. These practices, auditors said, violated reconciliation protocols and diverted public funds without documentation.
Although the Law Secretary assured lawmakers that amendments would be introduced to regulate salary determination, no timeline has been announced. The Finance Ministry has also remained silent on whether illegally disbursed amounts will be recovered or what penalties officials may face. Lawmakers complain that oversight efforts are being slowed by resistance from within SECP and by institutional influence shielding implicated officers.
Meanwhile, SECP Chairman Saeed, who assumed office on December 16, 2022, is reportedly seeking an extension in his tenure despite being at the center of a massive financial scandal. His bid for continuation has triggered sharp debate in political and business circles, with critics arguing that such a move would signal tolerance for financial misconduct at the highest levels of regulation. Business leaders privately caution that retaining the same leadership without accountability will deepen distrust in the regulator and discourage both domestic and foreign investors from engaging with Pakistan’s fragile markets.
Public frustration is also rising, as ordinary citizens see the episode as yet another example of how powerful officials avoid consequences. At the same time, households and small businesses bear the brunt of inflation and declining public services. The perception that elite institutions can defy both financial rules and parliamentary oversight is reinforcing cynicism about the state’s ability to enforce accountability across the board.
Analysts warn that unchecked irregularities in a key financial watchdog carry consequences far beyond inflated pay scales. If the regulator responsible for overseeing capital markets and corporate governance is perceived as compromised, investor confidence will weaken, capital market development will stall, and broader economic stability will come under pressure.