Tk 1,497cr fines imposed in stock market crackdown

The Bangladesh Securities and Exchange Commission (BSEC) has imposed fines totalling Tk 1,497 crore on individuals and institutions involved in stock market looting and corruption during the tenure of the previous “fascist government”, Finance Minister Amir Khosru Mahmud Chowdhury said yesterday.

Responding to a question from member of parliament Kamrul Hasan during the question-and-answer session in parliament, the minister said Tk 428 crore of the total fines had been imposed on various individuals and institutions for manipulating transactions involving Beximco shares.

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He said disciplinary measures had been taken following investigations into the IFIC Guaranteed Sreepur Township Green Zero Coupon Bond over irregularities in the issuance of Tk 1,000 crore worth of bonds by Sreepur Township Ltd.

IFIC Bank PLC’s former chairman, Salman F Rahman, and former vice chairman Ahmed Shayan Fazlur Rahman were declared persona non grata for life and permanently barred from participating in all capital market-related activities in Bangladesh. Salman was fined Tk 100 crore, while Ahmed Shayan was fined Tk 50 crore.

Former BSEC chairman Prof Shibli Rubaiyat-ul-Islam and former commissioner Dr Shamsuddin Ahmed were also declared persona non grata and barred from participating in capital market-related activities in Bangladesh for life and five years, respectively.

Former IFIC Bank Ltd managing director Shah Alam Sarwar was fined Tk 5 crore.

Former IFIC Investment Ltd chief executive officer Imran Ahmed was barred from participating in all capital market-related activities in Bangladesh for five years.

The finance minister said disciplinary action had also been taken following investigations into Ring Shine Textiles Ltd over irregularities involving the withdrawal of capital from the company.

Tania Sharmin, former managing director and chief executive officer of CAPM Advisory Limited, was barred from capital market activities for five years, while Mahbub H. Majumder, former chief executive officer of AFC Capital Limited, received a similar five-year ban.

The minister said enforcement action was also under way following investigations into alleged irregularities in the acquisition of a 25 percent stake in Chittagong Stock Exchange PLC by ABG Limited, a subsidiary of Bashundhara Group, as its strategic partner.

According to the minister, the BSEC is conducting disciplinary proceedings over irregularities involving Acme Pesticides Limited, Al-Amin Chemical Industries Ltd., Emerald Oil Industries Ltd., Sonali Paper and Board Mills Ltd., and BEXIMCO Green Sukuk Al Istisnaa.

“The Bangladesh Securities and Exchange Commission has sent a letter to the Anti-Corruption Commission to take action regarding irregularities and possible money laundering in the above matters,” he said.

He further said the trading licences of stockbroker firms accused of embezzling investors’ funds, including Tamha Securities Ltd., Bangco Securities, Crest Securities Ltd., and Moshiur CQ Ltd., had been cancelled. Cases had been filed against some of them, while in other cases letters had been sent to the Anti-Corruption Commission seeking action over alleged corruption and possible money laundering.

Replying to a supplementary question from Kamrul Hasan, the finance minister said legal proceedings and investigations against the former BSEC chairman and others were already under way.

He informed parliament that the BSEC had been reconstituted with one chairman and three members, while the appointment of another member was under way.

“None of them were appointed on political considerations. The recruitment process was so transparent that even as Finance Minister, I did not personally know the appointees beforehand,” he said.

Since the new commission assumed office, the stock market has shown a steady upward trend, with the index making greater progress over the past two months than in the previous five years, he said, attributing the improvement to greater transparency and renewed investor confidence.

Amir Khosru said the government had already initiated major reforms to strengthen governance and credibility in the capital market and would continue those efforts.

He said confidence had returned among domestic investors, state-owned institutions and international fund managers, with investors from major financial centres, including Hong Kong, New York and London, expressing interest in Bangladesh’s capital market.

The minister expressed hope that the ongoing reforms would transform the market into an internationally recognised, transparent, accountable and reliable one, adding that the recent rise in investor confidence and share prices reflected their positive impact.