The Financial Express

BSEC order to sell broker’s licence to pay dues

| Updated: November 03, 2019 11:37:28

BSEC order to sell broker’s licence to pay dues

The securities regulator has asked the country's premier bourse to take an initiative for repaying the dues of the clients of Shah Mohammad Sagir & Company by selling its brokerage licence.

The decision came on Thursday at a meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC).

The BSEC has also asked the Dhaka Stock Exchange (DSE) to file a criminal case against the persons involved with embezzlement of the funds paid by the clients of Shah Mohammad Sagir & Company, a brokerage firm.

According to the officials, investors lodged 48 complaints through the newly introduced Customer Complaint Address Module (CCAM) against the Shah Mohammad Sagir & Company.

Most of the complaints were about non-refund of the clients' funds deposited to purchase IPO (initial public offering) shares.

Following the complaints, the securities regulator earlier sent letters to the DSE chairman and the DBA (DSE Brokers Association) president urging them to resolve the problem. But no outcome was visible. Later the DSE formed an inquiry committee as per the BSEC's instruction.

The DSE investigation revealed that Shah Mohammad Sagir & Company embezzled a substantial amount of investors' money.

Finally, the securities regulator on Thursday took the decision of repaying the dues of the clients of Shah Mohammad Sagir & Company by selling its licence.

In Thursday's meeting, the securities regulator also approved two proposals of bonds to be issued by Pubali Bank and United Finance.

Pubali Bank will raise capital worth Tk 7.5 billion issuing non-convertible subordinated floating rate bond.

The bond with tenure of seven years will be issued to financial institutions, corporate bodies, funds, insurance companies and eligible individuals.

United Finance will issue non-convertible zero coupon bond worth Tk 1.0 billion to institutional investors and high net worth individuals. The tenure of the bond will be four years.

The BSEC has also imposed a penalty worth Tk 0.5 million on each director of Generation Next Fashions Limited (GNFL) as the company failed to utilise rights issue fund properly.

International Accounting Standards were also not followed in preparing the company's financial statement.

The securities regulator has also excluded ATA Khan & Co, a chartered accountancy firm, from the BSEC's audit panel as the firm audited the financial statement of the GNFL for three consecutive years defying the rules.


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