Clients of Moshihor Securities demand chief adviser's help to get their money back

Hundreds of investors of Moshihor Securities demand the chief adviser's intervention to get their money back from the brokerage firm that had reportedly siphoned off more than Tk 1.61 billion.

One of them, Gazi Mohammad Elias spoke on behalf of 200 defrauded investors at a press briefing at the CMJF auditorium in the capital on Thursday.

Moshihor Securities, a brokerage firm under the Dhaka Stock Exchange (DSE), embezzled clients' money by using duplicate back-office software and providing fake information to clients on their investment status.

The embezzlement came to light in August last year as the DSE unearthed a deficit of Tk 686 million in the consolidated customers' account (CCA). The exchange then suspended the firm's operation on August 19.

One of the victims of the financial fraud is Abu Masud Khan.

Mr Khan, a retired army officer, opened a beneficiary owner's (BO) account with Moshihor Securities around 15 years back and invested around Tk 3.7 million in stocks.

He went to the brokerage house in August last year to transfer his shares on hearing news that the DSE had found shortfalls in the CCA.

After the suspension of share transactions, he immediately contacted the Central Depository Bangladesh Ltd (CDBL) and learnt that all of his shares had been sold off.

"I have invested my hard-earned money here and become helpless," said Mr Khan.

The brokerage house gave Mr Khan a cheque of Tk 1 million last month but the cheque bounced. Now, he cannot reach anyone in the firm.

"I am very upset and cursing my luck for even investing in the stock market," he said.

This is not just one case. Hundreds of investors have been victimized in a similar fashion.

Farhana Zafrin, another client, claimed that she had invested around Tk 10 million of her pension funds through Moshihor Securities.

"I lost all my pension money here. I'm having a difficult time running my family," she said with teary eyes.

The affected investors include many retired government officials who are currently living a miserable life, having lost all their savings to the brokerage house, said Mr Elias at the press briefing.

He alleged that the firm could embezzle the investors' money due to the absence of strict monitoring of the Bangladesh Securities and Exchange Commission (BSEC) and the Dhaka bourse.

The top brass of Moshihor Securities, including one of its directors Sheikh Mogol Jan Rahman, sold shares of clients by using duplicate software amid lax supervision of the regulatory bodies, Mr Elias said.

He claimed that the brokerage firm had used two back-office accounting software - one for the regulators and stakeholders, and the other for its clients - to provide misleading information. Investors did not have any way to know what was going on, Mr Elias added.

The victims of the scam repeatedly sought help from the BSEC and the DSE in the last few months, but no effective measure has been taken to date for refunds.

"We seek the intervention of the chief advisor to get back our money," said Mr Elias.

"Save us. Save the capital market. Otherwise, investors will lose their confidence in the market. If there is no safety of investment, people will not invest here," he added.

Embezzlement and mismanagement of clients' funds by brokers have remained long-standing unresolved problems. Major scams so far involved Crest Securities, Dawn Securities, Tamha Securities, Banco Securities, Shah Mohammad Sagir & Company and Tk 2.0 billion in total between 2019 and 2021.

The misappropriation of funds and shares by Moshihor Securities is the latest that was exposed in August last year after the new commission led by Khondoker Rashed Maqsood took charge.

Meanwhile, law enforcement agencies on August 30 last year imposed a travel ban on Moshihor Securities' CEO Ziaul Hossain Chisty, Managing Director Moshihor Rahman, and Director Sheikh Mogol Jan Rahman over the scam.

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