Regulator’s defense raises more questions than it answers
PAC shocked over Rs41m salary of SECP chairman
Staff Report
ISLAMABAD: The Securities and Exchange Commission of Pakistan’s aggressive rebuttals to federal audit findings has exposed deep contradictions in its governance posture, further eroding institutional credibility. The Public Accounts Committee (PAC), already alarmed by reports of Rs41 million annual salary for the SECP Chairman, now faces a regulator that appears unwilling to engage with oversight mechanisms or acknowledge the scale of documented violations.
Audit records for FY 2023–24 revealed Rs267.5 million in unauthorized payments to SECP’s top management, including Rs156.6 million in general perks and Rs110.9 million under a Rest and Recreation Allowance. These were approved by the Policy Board without mandatory clearance from the Finance Division, in direct violation of a January 2024 directive and the Rules of Business, 1973. The AGP report also cited a binding Supreme Court judgment affirming that such rules are legally enforceable across autonomous bodies.
Despite these findings, the SECP has challenged the AGP’s jurisdiction, citing administrative and financial independence under the SECP Act, 1997. It claims the Policy Board holds authority to determine remuneration, a position the audit department has rejected as legally untenable. The regulator’s defense hinges on Section 5(4) of its own Act, while ignoring Section 23(1) of the Public Finance Management Act, which mandates the deposit of surplus receipts into the Federal Consolidated Fund.
The audit estimates that over Rs14 billion, including Rs6.99 billion in surplus receipts and Rs7.11 billion in collected revenues, were withheld from the national treasury. SECP’s silence on this issue, while defending executive compensation, has drawn criticism from legal experts and market observers. “If previous PAC decisions truly vindicated SECP’s position, why did identical violations resurface?” a corporate lawyer remarked.
The AGP report confirms that SECP was formally invited to Departmental Accounts Committee meetings on January 14 and February 6, but failed to respond. This lack of engagement has raised concerns about the regulator’s commitment to transparency and its willingness to cooperate with constitutional oversight.
SECP’s claim that the Public Accounts Committee settled similar issues in July 2025 has done little to quell criticism. Business leaders argue that recurring violations point to systemic governance failures, not isolated lapses. The regulator’s complaint about media imbalance also appears misplaced, as audit findings carry institutional weight that rebuttals alone cannot dismiss.
As the controversy deepens, SECP faces the challenge of restoring credibility while addressing the governance lapses that triggered the audit in the first place.
The Public Accounts Committee (PAC) has called for an immediate halt to all unauthorized payments and directed that SECP’s salary structure be submitted to the Finance Division for retroactive approval.
Chairman Junaid Akbar Khan questioned how a country in economic distress could justify such compensation packages. Does the SECP Policy Board have unchecked authority to set executive salaries without oversight from the federal government or Finance Division?
He instructed the Finance Division to present details including a list of other institutional heads drawing salaries in the hundreds of millions which means that the other regulators may face the consequences of ignoring merit and focusing on personal welfare like SECP.
