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The Bangladesh Securities and Exchange Commission (BSEC) has slapped ex-managing director of IFIC Bank with a fine of Tk 50 million for deceptive promotion of a zero-coupon bond.
According to a press release issued after the commission's meeting on Tuesday, the penalty was handed down for breach of securities laws in connection with "IFIC Guaranteed Sreepur Township Green Zero Coupon Bond," which carried a face value of Tk 15 billion and an issue value of Tk 10 billion.
The regulator said IFIC Bank acted as the guarantor of the bond, while IFIC Investments Ltd served as its adviser and arranger. However, the bond was issued by Sreepur Township Ltd (STL) - a real estate firm associated with Salman F Rahman, former chairman of IFIC Bank and private sector investment adviser to the ousted prime minister Sheikh Hasina.
Advertisements and promotional content had used the name of IFIC Bank, giving false impression that the bank was the issuer, reads the press statement.
The commission stated that this misrepresentation had misled investors and violated core provisions of securities laws and investor protection principles.
Earlier, the BSEC permanently banned Salman F. Rahman from participating in the stock market for misleading investors through the deceptive marketing of the bond.
A lifetime ban has also been imposed on his son, Ahmed Shayan Fazlur Rahman, the bank's former vice chairman, and on Prof. Shibli Rubayat-Ul-Islam, former chairman of the BSEC, for their roles in the same scheme.
The commission also fined Salman F. Rahman Tk 100 crore and his son Shayan Tk 50 crore for their involvement.
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