BSEC launches "special investigation" into Haji Ahmed Brothers Securities

The securities regulator has ordered a "special investigation" into Haji Ahmed Brothers Securities Ltd, citing the need to protect the interests of the capital market and general investors.

Md Abul Kalam, spokesperson of the Bangladesh Securities and Exchange Commission (BSEC), told The FE that the regulator has already detected irregularities at the brokerage house, but said a further probe is required before any licence cancellation.

"Before cancelling the licence, another investigation is needed. We will share our findings, and the firm will get the opportunity to defend itself," he said.

However, Kalam did not elaborate on the nature of the irregularities.

According to sources, the BSEC had initially decided to cancel the licence of Haji Ahmed Brothers Securities Ltd following multiple allegations. The special investigation has now been launched to gather necessary evidence and conduct a comprehensive assessment.

Recently, the BSEC's Market Intelligence and Investigation Department issued a formal investigation order in this regard, sources said. The order has also been sent to the managing director or chief executive officer of the brokerage house, which is a member of the Dhaka Stock Exchange (DSE).

In the order, the BSEC said the decision was taken in line with Section 17A of the Bangladesh Securities and Exchange Commission Act, 1993, and Rule 12(3) of the Securities and Exchange Commission (Stock-Dealer, Stock-Broker and Authorised Representative) Rules, 2000.

To carry out the probe, the regulator has formed a three-member investigation committee and directed it to submit a report to the commission within 30 working days from the issuance of the order late last month.

The committee comprises BSEC Deputy Director Shahriar Parvez, Assistant Director Kulsum Akhter and Assistant Director Mohammad Saidul Islam.

The committee will examine the overall operational status of Haji Ahmed Brothers Securities Ltd, including whether the firm has properly complied with securities laws and regulatory requirements. It will also assess whether cancellation of the broker's licence would be justified.

"If any discrepancies or violations are found, the commission will take necessary actions accordingly," the BSEC spokesperson said.

Raquib Md Fakhrul is currently the managing director of Haji Ahmed Brothers Securities Ltd, while Ayesha Dada serves as its chief executive officer.

Fakhrul declined to comment on the matter when contacted by The FE.

The brokerage firm is a sister concern of the Munshi Group, a conglomerate owned by late AFM Fakhrul Islam Munshi, an Awami League advisory council member and former deputy minister.

Market participants say the BSEC has recently strengthened its oversight of brokerage houses to ensure financial transparency and investor protection. As part of this initiative, the regulator has been conducting regular inspections, inquiries and investigations.

They note that failure to safeguard clients' funds and securities can severely undermine investor confidence.

The securities commission, reconstituted after the political changeover in August 2024 and now led by Khondaker Rashed Maqsood, has adopted a tougher stance against brokerage firms facing shortages in consolidated customers' accounts.

The BSEC maintains that intensified regulatory scrutiny is part of its broader effort to restore market discipline and punish institutions involved in irregularities, adding that misconduct and investor-unfriendly practices will not be tolerated in the capital market.

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