The Securities and Exchange Commission of Pakistan has approved the referral of the Blink Capital Management (Private) Limited case to the Federal Investigation Agency for further investigation and legal action following allegations of illegal deposit-taking, guaranteed-return investment schemes and a suspected Ponzi-type fraud involving claims of more than Rs446.6 million. The action follows an investigation initiated by the Securities and Exchange Commission of Pakistan after investors complained that Blink Capital had collected funds from members of the public by promising fixed returns and repayment of their original investments through post-dated security cheques. Blink Capital Management was a licensed futures broker and market maker of Pakistan Mercantile Exchange Limited, with its registered office located at 13-A-3, Mian Mehmood Ali Kasoori Road, Gulberg III, Lahore, and branches in Karachi and Islamabad. The company’s directors and shareholders included Hassan Maqsood, who was the then Chief Executive Officer, and Muhammad Farooq, who served as a director. The matter first came to attention in June 2025 when Pakistan Mercantile Exchange received complaints from investors and members of the public alleging that Blink Capital was accepting deposits on a fixed-profit basis while guaranteeing repayment of the original investment through post-dated security cheques. Pakistan Mercantile Exchange subsequently introduced interim measures, including freezing funds and restricting Blink Capital’s market-making activities. Following an inquiry, the exchange found the broker non-compliant with the applicable regulatory framework, imposed a penalty of Rs1 million and suspended Blink Capital’s trading rights. The company subsequently closed its offices and disabled its website, while complaints continued to reach both Pakistan Mercantile Exchange and the Securities and Exchange Commission of Pakistan.
Following the continued complaints, the Securities and Exchange Commission of Pakistan initiated a formal investigation under Section 83 of the Futures Market Act, 2016, through an investigation order dated August 15, 2025. The investigation established that 35 complainants had submitted claims totalling Rs446.664 million. Of these 35 complainants, Blink Capital had opened trading accounts with Pakistan Mercantile Exchange for only seven clients, and those accounts were found to be inactive. The investigation team then conducted a detailed financial-trail analysis involving 29 complainants and Rs408.6 million, representing approximately 91.48 percent of the total amount claimed. Complaints received at a later stage were not included in the financial-trail analysis, although the investigation team observed similar transaction patterns in those cases. The complainants submitted documentary evidence relating to approximately Rs406.542 million of the Rs408.6 million covered by the financial-trail analysis, including evidence concerning cash payments. Investigators were able to trace Rs360.17 million through bank accounts connected with Blink Capital, its management and associated persons. According to the financial trail, Rs288.32 million, representing 80.05 percent of the traced amount, was transferred to Blink Capital. A further Rs10.35 million, or 2.87 percent, was transferred to then Chief Executive Officer Hassan Maqsood, while Rs500,000, or 0.14 percent, was transferred to Muhammad Farooq, director, and Ammara, identified as Farooq’s spouse. Another Rs60 million, equivalent to 16.66 percent of the traced amount, was transferred to an account titled Blink Capital Management, which was registered as a sole-proprietorship business in the name of employee Ali Fida. An additional Rs1 million, representing 0.28 percent, was transferred to Ali Fida, who served as Chief Operating Officer of Blink Capital.
The investigation found that substantial portions of the funds were moved into the personal accounts of then Chief Executive Officer Hassan Maqsood and director Muhammad Farooq, while significant amounts were also withdrawn in cash. Additional transfers were made to the personal accounts of Blink Capital employees, including Rizwan, Shahid, Noaman and Ali Fida. Investigators also identified transactions in which funds were transferred to certain Blink Capital complainants, apparently as profit payments. The financial review further found that approximately Rs90 million transferred to Pakistan Mercantile Exchange was subsequently withdrawn, with a major portion of those funds later deposited into the accounts of Hassan Maqsood and Muhammad Farooq. According to the investigation, Blink Capital entered into agreements with investors, mostly for two-year periods, under which it offered fixed monthly or annual returns. The promised returns ranged from 3.7 percent per month to 48 percent per annum. These agreements were executed on stamp paper and were generally signed by then Chief Executive Officer Hassan Maqsood, while some were signed by then director Muhammad Farooq. The agreements were mostly witnessed by Ali Fida and, in certain cases, by Blink Capital employees Muhammad Shahid, Muhammad Noaman and Muhammad Rizwan. Blink Capital also issued post-dated cheques as guarantees, with most of the cheques signed by Hassan Maqsood and some signed by Muhammad Farooq. Based on the evidence available to it, the investigation team concluded that Blink Capital was allegedly operating a Ponzi-type fraudulent investment scheme, collecting funds unlawfully from the general public and offering guaranteed returns beyond the activities permitted under its licensed status.
The investigation further found that funds were primarily collected through Blink Capital’s proprietary account, the personal accounts of its directors and an account titled Blink Capital Management, which was declared as a sole-proprietorship business in the name of employee Ali Fida. According to the findings, Blink Capital maintained this bank account under Ali Fida’s name and received Rs60 million from complainants through the account. The funds were subsequently transferred to Ali Fida’s personal account, while certain amounts were withdrawn in cash and some payments were made to complainants. The investigation team concluded that Blink Capital was involved in illegal deposit-taking and the offering of guaranteed returns, identifying potential violations of the Companies Act, 2017, the Futures Market Act, 2016, and the Futures Brokers (Licensing and Operations) Regulations, 2018. The investigation specifically referred to Section 84(1) of the Companies Act, 2017, concerning acceptance of deposits from the public, as well as Section 47(2) of the Futures Market Act, 2016. Under the latter provision, the investigation found that Blink Capital allegedly failed to operate within the requirements of its licence and exceeded the scope of its authorised activities by engaging in illegal deposit-taking and offering guaranteed returns. Considering the nature and gravity of the findings, the Securities and Exchange Commission of Pakistan Commission approved referring the case to the Federal Investigation Agency under Section 41-B of the SECP Act, 1997. The referral is intended to allow further investigation and appropriate action under the law, while also facilitating the redressal of grievances raised by affected investors.
Securities and Exchange Commission of Pakistan Chairman Dr. Kabir Ahmed Sidhu said the regulator would take a strict approach against market abusers, manipulators and entities that misuse their regulated status to deceive investors. He said safeguarding investors’ interests remained a priority and that the Securities and Exchange Commission of Pakistan would pursue individuals and entities that abuse the market or investor trust, while taking necessary regulatory and enforcement measures to protect investors and preserve market integrity. The regulator has also warned members of the public to remain cautious when dealing with unauthorised investment schemes, particularly arrangements that promise fixed or guaranteed returns. Investors have been advised to verify the legal status of an entity before committing funds and to establish whether the business activities being offered fall within the activities for which the entity is authorised. The Blink Capital case highlights the regulatory risks associated with investment arrangements that promise predetermined returns outside the scope of a licensed financial or capital market activity. With the case now referred to the Federal Investigation Agency, further investigation and legal action will determine the next steps in relation to the allegations and the grievances raised by affected investors. The Securities and Exchange Commission of Pakistan’s warning also reinforces the importance of conducting appropriate checks before placing funds with investment businesses, particularly where returns are presented as fixed or guaranteed.
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