BSEC fined manipulators Tk 1,488cr in last 1.5 years

Bangladesh Securities and Exchange Commission (BSEC) fined individuals, intermediaries and firms a total of Tk 1,488 crore for their involvement in stock market manipulation during the interim government’s tenure. So far, the commission has received Tk 5.23 crore of the total fine amount.

Recovery of the fines remains slow as the entities have taken the matter to court, and it remains stuck in the legal process.

The commission recently disclosed this information to the finance ministry in its performance evaluation of the last 1.5 years.

The fine includes the amount that a manipulator gained from their manipulation, after deducting 10 percent for tax, according to the regulator.

In the last one and a half years, the regulator ran 12 investigations by an external investigation committee and 114 investigations by its own team.

Considering the extent of the offence, 16 corruption cases were sent to the Anti-Corruption Commission and other government agencies for taking steps.

“What a commission can do at most is set a financial penalty to punish manipulators, which it did successfully,” said Professor Al-Amin of the Accounting Department at Dhaka University.

“Whether the fines will get paid or the fined entities will get a clean sheet from the court is not the BSEC’s concern,” he said, pointing out that due process was followed in setting the penalties.

Although some investors accused the regulator’s penal decision of impacting the market, this line of thinking is not logical. Moreover, the fine was necessary to keep manipulators at bay, and it will benefit the capital market in the long run, Professor Al-Amin added.

Regarding the BSEC’s performance in the last 1.5 years, he said it would have been better if the regulator could have convinced at least two or three state-run companies to join the capital market in this period.

In its letter to the ministry, BSEC said that 18 companies raised funds of Tk 9,571 crore through bond issuance and 22 companies collected capital of Tk 3,170 crore through right shares in the last 1.5 years. A system has been developed so that initial public offering (IPO) applications can be submitted online and applicants can track the status of the approval.

Moreover, BSEC said in the letter that it formed and approved three regulations, amended two regulations, and drafted two acts and ordinances during this period.

Khondoker Rashed Maqsood, chairman of BSEC, said during an event on Sunday that anyone who is fined -- even if the amount is just Tk 100,000 -- gets around nine months across different legal stages to make the payment.

In addition, everyone has legal rights, and many are challenging the fines in court, he noted.

He expressed confidence that the entire amount will be deposited in the national exchequer within one to two years.