Provincial court delivers Pakistan’s first-ever conviction for insider trading

Stock brokers monitor share prices displayed on a digital screen during a trading session at the Pakistan Stock Exchange (PSX) in Karachi on February 12, 2024. (AFP)
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Updated 17 June 2025
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Provincial court delivers Pakistan’s first-ever conviction for insider trading

  • SECP says bank official misused insider information related to investment, disinvestment decisions for “personal gain“
  • Financial regulator says court slaps $30,380 penalty on convict, with the amount to be deposited within seven days

KARACHI: A Pakistani court recently handed its first-ever conviction for insider trading, the Securities and Exchange Commission of Pakistan (SECP) said on Tuesday, hailing the judgment as one which will boost investors’ confidence in the country’s capital markets. 

Insider trading refers to the practice of buying or selling a publicly traded company’s securities while in possession of material information that is not yet public information. The SECP said it had filed a case against Zakir Hussain Somji, assistant vice president of investments at Habib Metropolitan Bank (HMB) Limited, after inspecting suspicious trading activity from Jan. 1, 2014, to Feb. 2, 2016.

The regulator said it was suspected that the accused, through his position at HMB, misused insider information related to the bank’s investment and disinvestment decisions for personal gain. The SECP said a probe revealed Somji bought 11,795,100 shares of various companies, including 1,230,900 shares (10.43 percent) acquired from HMB. He sold 11,836,600 shares — 4,915,200 (41.52 percent) of which were sold back to HMB, earning an “unlawful profit” of Rs2,866,646 [$10,116.39]. 

“Sindh Special Court (Offences in Banks) handed out first ever conviction for insider trading in the history of Pakistan in a case filed by The Securities and Exchange Commission of Pakistan (SECP),” the regulator said. 

It said Somji had been convicted by the court on June 14 for violating provisions of Section 128 of the Securities Act, 2015, which related to insider trading. 

The regulator said the court slapped Somji with a penalty of Rs 8,599,938 [$30,380] which was three times the “unlawful gain.”

“The amount is to be deposited within seven days, failing which the convict will be remanded to jail until full payment is made,” the SECP said. 

The regulator said the judgment reaffirms SECP’s mandate to ensure market integrity and investor protection.

“It sets a strong precedent for future enforcement actions and sends a clear message that market abuse and regulatory violations shall not be tolerated,” it added. 
 


In Karachi, a café where Ramadan means feeding anyone who arrives hungry

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In Karachi, a café where Ramadan means feeding anyone who arrives hungry

  • Karachi’s Cafe Mehmood has offered free meals to the needy for nearly four decades
  • Restaurant owners say paying customers and charity diners receive the same quality food

KARACHI: As the call to Maghrib prayer echoes through Karachi’s Sindhi Muslim Housing Society, long rows of people seated along a busy roadside begin to break their fast. Plates of fruit, samosas and glasses of the rose-flavored drink Rooh Afza move down the line as men, women and children share the evening meal after a long day of fasting in the city’s humid heat.

The gathering is a familiar Ramadan scene outside Cafe Mehmood, a modest restaurant in Pakistan’s largest city that has quietly sustained one of Karachi’s longest-running traditions of feeding the hungry.

Operating since the 1980s, the eatery is well known not only for its food but for a daily dastarkhwan, a communal meal spread laid out for anyone who arrives hungry. Donations collected from visitors and well-wishers help fund the initiative, allowing the restaurant to provide meals throughout the year to people who cannot afford to pay.

The tradition reflects a wider culture of charitable food distribution in Pakistan, particularly during Ramadan, when mosques, community groups and businesses organize iftar meals for fasting Muslims. In Karachi, a sprawling city of more than 20 million people, such initiatives often fill gaps in a fragile social safety net.

“Around 12,000 people come to this dastarkhwan daily and derive benefit from it,” said Imran Khan, the eldest son of one of the restaurant’s founders.

Pakistan, a country of more than 240 million people, has struggled with rising living costs in recent years following economic turmoil marked by inflation, currency depreciation and higher energy prices. For many families dependent on daily wages or informal employment, free community meals can provide an essential lifeline.

Cafe Mehmood’s story began in 1985, when three brothers opened the restaurant and named it after one of them, Mehmood. The charitable meals started modestly when the founders began serving food to a handful of people sitting on the footpath outside the restaurant.

Over time, word spread and more people began arriving. Donations from visitors and well-wishers helped expand the effort into a large-scale operation feeding thousands each day.

Communal meal spreads are common across Karachi, particularly during Ramadan, but the scale and schedule of the dastarkhwan outside Cafe Mehmood sets it apart.

“There are no specific [meal] timings,” Khan said. “It starts at seven in the morning and runs until 12 at midnight. During that period if anyone comes empty stomach, they are fed well.”

During Ramadan, however, the restaurant focuses its efforts on iftar and the meals that continue until the pre-dawn suhoor.

The service runs throughout the year, pausing only on three days annually: Eid Al-Fitr and the first two days of Eid Al-Adha. 

According to Khan, the restaurant prepares iftar for around 2,000 to 2,500 people each day, followed by dinner for roughly the same number.

To manage the demand, Cafe Mehmood operates a separate kitchen dedicated to preparing food for the charity meals. Inside the restaurant, customers who pay for their meals sit at tables, while outside, those who cannot afford to pay are served at long communal spreads laid out on the street.

Yet the owners say the difference is only in where the food is served, not in its quality.

“We make sure there is no compromise on quality while the taste, hygiene and service is similar to what we offer to our customers,” said Ismail Saeed, one of the founders’ grandsons who joined the family business five years ago.

Today, the restaurant and its charitable kitchen are run by the next generation: six members of the founding families and their nine sons.

Saeed said he had long wanted to take part in continuing the tradition.

“It has been a part of our genes since the beginning to help the needy, not just in terms of food but otherwise as well,” he said.

“We were provided with a platform through which we could do it, so I was always very keen about it.”

The charity meals are sustained through a combination of restaurant contributions and public donations. Visitors frequently stop by to give cash, while others transfer money online after learning about the initiative.

For those who cannot attend the communal meal spreads in person, the restaurant also distributes food parcels, particularly to women and people registered as deserving beneficiaries.

A typical meal served through the charity program includes chicken or beef gravy with two flatbreads, costing around Rs110 (about $0.39) per serving.

Despite its popularity, Cafe Mehmood historically avoided promoting its charitable work. For the family that runs the joint, the goal has remained simple: that no one who comes to their door leaves hungry.

“It was also the need of the hour,” Saeed said.