A study by the Pakistan Institute for Development Economics (PIDE) has found that 31 families dominate the Pakistan Stock Exchange and that the boards of directors of KSE 100 index companies are mostly filled with people close to these families.
According to a study by PIDE Vice President Dr. Nadeem Ul-Haq and Amin Hussain, Small Club: Distributors and Networks in the Pakistani Economic Market, has mentioned that back in 2018, when this data was collected, 31 business families were dominant in the market, the study sheds light on corporate groups and their ownership in the stock market.
The study further mentioned how the board of directors of the company is formed and how the owner and his family influence the structure and professional management of the company. The study showed that these families have a significant influence on business due to privatization and the absence of Corporate best practices.
Dr. Mahboob Ul-Haq mentioned that back in 1967, there was a monopoly of 22 families in Pakistan. After 50 years, most of the Stock Market fortune was owned or controlled by 31 families.
The boards of directors include representatives from the corporate sector, the business community, retired officers, government officials and the military.
Joining the board of directors is tantamount to membership in a Pakistani elite club, according to the study, and the study challenges the notion that the stock market is a reflection of Pakistan’s strong economy and vibrant financial sector.
The study found that there is a network of Board of Directors in corporate sector, which should be of concern.
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