Report on CGT: SECP issues notice to private TV channel

[Naveed Yaseen]

ISLAMABAD (June 08 2008): The Securities and Exchange Commission of Pakistan (SECP) has sent a notice to a private news TV channel for what it says acting in irresponsible manner and deceiving public at large by running a news ticker about the issue of extension in exemption to Capital Gains Tax.

"The news ticker was aired on Geo News on June 6, 2008, relating to an interview of Abdullah Yousuf, Chairman Federal Board of Revenue. "The ticker quoted Yousuf stating that up till now no decision has been taken by the government regarding the extension in exemption to Capital Gains Tax and that the matter would be addressed in the upcoming Finance Bill.

"There was significant adverse effect of this news on the capital market and within 15 minutes of the airing of news ticker, KSE 100 index dropped by over 200 points.

"As reported in the press on June 4, 2008, a delegation of KSE met with the Minister of Finance on June 03, 2008 wherein it was decided to extend the exemption of Capital Gains Tax for further two years. This fact was also published in the Daily News and Jang on June 5, 2008.

"The subject interview of Abdullah Yousuf was apparently taken before the above mentioned announcement and hence did not reflect the current status on the applicability of Capital Gains Tax. Despite this fact, Geo News aired the ticker on the basis of this interview, giving false and misleading impression that there has been further development in this matter and exemption of Capital Gains Tax is not extended.

"Soon after the news ticker was aired, Abdullah Yousuf reportedly called Geo News and clarified the position. However, the above-mentioned news ticker continued to display on the network for a further hour. "The contents of this interview were also displayed on the Geo Website and no clarification was posted in this regard on the website till evening.

"It is apparent that Geo Television Network acted in an irresponsible manner and public at large was deceived by the news ticker and the updates on the Geo News website.

"SECP takes serious notice of activities which may result in market manipulation. Explanation has been sought from the CEO of Geo Television Network not later than June 10, 2008. It may be remembered that intentional market manipulation is an offence under the provisions of Section 17 of the Securities and Exchange Ordinance, 1969," the SECP press release concluded.

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