Over two-third unit-holders of two listed mutual funds (MFs) have applied to their trustee for changing the asset manager of the funds.
The MFs are DBH 1st Mutual Fund and Green Delta Mutual Fund. LR Global Bangladesh is the asset manager of these two funds.
The unit-holders, who have applied to change the asset manager, hold 72.50 per cent units of DBH 1st MF and 70.12 per cent units of Green Delta MF.
In their prayers, they have urged Bangladesh General Insurance Company (BGIC), the trustee of the mutual funds, to appoint IDLC Asset Management as their fund manager.
"The unit-holders have proposed to change the asset manager, as they have lost faith in the company," said Md. Moniruzzaman, managing director of IDLC Investments.
He also said the recent incident of injecting fund into non-listed securities by defying the securities rules has also prompted them to propose the change.
The unit-holders made the plea of changing their asset manager as per Section 31 of the Securities and Exchange Commission (Mutual Fund) Rules, 2001.
According to it, subject to prior approval of the commission, the trustee can change the appointment of an asset manager following the demand of two-third (66.67 per cent) unit-holders.
Earlier, the unit holders of the Sandhani Life Unit Find changed the asset manager of the fund.
The institutional investors, who have applied for changing the asset manager of Green Delta MF, are - BRAC Bank, NCCBL, EBL, Delta Life, DBH, Green Delta Insurance, IDLC Investments, IDLC AML, VIPB Asset Management, Edge Asset Management, Vanguard Asset Management, a foreign investor, and Agrani Equity, among others.
The institutional investors, who have applied for changing the asset manager of DBH 1st MF, are - BRAC, BRAC Bank, Delta Brac Housing Finance, IDLC Investments, UCB, VIPB Asset Management, IDLC Asset Management, Delta Life Insurance, EDGE Asset Management, and Asian Tiger Capital Partners Asset Management.
Earlier, LR Global Bangladesh extended the tenures of its mutual funds for another term of ten years following a directive of the securities regulator.
After the tenure extension, the unit-holders having three-fourth units of DBH 1st MF sent letter to the trustee to call unit-holders' meeting for conversion of the fund into an open-ended one.
Later, the securities regulator asked BGIC in a letter to call meeting in line with the existing rules. On Thursday, the securities regulator again sent a letter to BGIC for calling the meeting.
Reaz Islam, CEO at LR Global Bangladesh, said they have 10 years of solid performance record in a flat market as well as cash dividend history of over 40 per cent. "Our performance speaks for us, and we treat every invert equally."
He said the company has already disclosed the names of a few of its competitors publicly, who were engaged in market manipulation to take large positions in the funds managed by LR Global.
"We strongly believe they will be punished under the laws of Bangladesh."
He also said mutual funds are primarily for retail investors. Anyone, engaged in exploiting any loophole for personal short-term gains at the expense of retail investors, will be sternly dealt with. The officials of BGIC could not be reached for comment despite several efforts.
On the close of operation on October 24, 2019, Green Delta MF reported NAV of Tk 9.78 per unit on the basis of current market price and Tk 10.00 per unit on the basis of cost price against the face value of Tk 10.
On the close of operation on October 24, 2019, the DBH 1st MF reported NAV of Tk 9.86 per unit on the basis of current market price and Tk 10.11 per unit on the basis of cost price against the face value of Tk 10.