Karachi, Nov 13: The Karachi Stock Exchange on Thursday disposed of the membership card of one of the two defaulter brokers at a price of Rs55 million.

The bourse had announced on Tuesday that it was putting the two cards on the auction block. Bids were invited by the KSE from “individuals and eligible corporate bodies, financial institutions/banks (local & foreign)”, to reach the Exchange by 1 pm on Thursday.

The development followed the notice by National Clearing Company of Pakistan (NCCPL), which was endorsed by the bourse, on Monday, declaring two stock brokers: Sikandar Ismail Bagasra and Ismail Abdul Shakoor as ‘defaulters’ for having failed to clear dues.

In realisation of the unsettled amounts, the broker cards were first to go under the hammer, which would be followed by sale of telephone booths.

An official handout on the results of the card auction was not released on Thursday.

Knowledgeable sources, however, confirmed that one card had fetched Rs 55 million. The identity of the buyer was being kept a secret. But sources close to the process said that the purchaser was a party “new to the exchange and engaged in the shipping business, with other interests in trade mainly that of rice”. Six bids were understood to have been received with the lowest offer of Rs30 million and the highest at Rs50 million. “It took a little persuasion to make the highest bidder improve his bid by another Rs5 million”, said the source.

The Exchange opted to sell the card of Bagasra Securities (Pvt) Limited first, for the party owed a larger sum of Rs51.4 million, remaining unpaid after sell out of his “retrieved shares”. The other defaulter Ismail Abdul Shakoor Securities (Pvt) had fallen short of just Rs5.4 million.

The priority to sale of the bigger default was understood to be to equip the bourse to settle claims of larger number of claimants. The claims have already been called to be filed within 45 days with the bourse. Considering that only five months ago before the current market turmoil began, each of the card held by the strong 200-member broker fraternity was valued at no less than Rs150 million, the drop in the price of major asset of a stock broker has been chilling.

Could the bourse have earned more if the sale were put off for the moment or until at least the ‘floor’ from the market was removed? A person overseeing the process said that the “distress sale” had to be undertaken for fear of a ‘stay order’ from the Courts. But he expressed optimism that the second card could bring in more money when it is offered later, owing to an imminent removal of ‘floor’ and some progress in demutualisation of the Exchange. He even claimed that a foreign investor had only a short while ago, expressed interest in laying US$1.5 million on the table. Most analysts nonetheless took that claim with a pinch of salt.