Sunday, July 14, 2024

Further probe needed before action: Muhith

He gives no timeline for fresh probe into share scam
The government on Saturday made public the investigation report on January’s stock market debacle suggesting further investigation before bringing charges against any individuals or organisations but gave no timeline for a fresh probe.
The finance minister, Abul Maal Abdul Muhith, at a briefing on Saturday evening announced that the government had already appointed a new chairman of the Securities and Exchange Commission in order to restructure the commission in line with the recommendations of the probe committee.
‘In most cases the probe committee has found some individuals and organisations responsible and recommended action on the basis of their [committee] perceptions and assumptions. It is not possible to press specific charges against anyone on the basis of that [recommendations],’ said Muhith.
He said, ‘More investigation is needed. The government does not want either to assassinate character of anyone on the basis of assumption or let any player
involved in the manipulations which affected the market, to get away with it using legal loopholes.’
When asked when the government would launch further investigation, he said, ‘We have already taken steps to restructure the SEC. The new chairman of SEC will take charge by this week. Two more members will be appointed to the commission. Let the commission take over and settle down. Then we will move for further investigation, which needs time for better results.’
The probe committee in its report linked a number of big market players like the chairman of the parliamentary standing committee on finance AHM Mostafa Kamal, Beximco’s Salman F Rahman, businessmen Mosaddek Ali Falu and Dhaka Stock Exchange director Rakibur Rahman to the stock market scam.
The minister, however, did not say anything about the possible government actions against the big market players.
The minister in his written statement said that measures would be taken for further investigation into 14 matters, including a thorough scrutiny of interconnection of 30 top placement share holders and how they arranged funds.
It said further probe would be launched into the role of the traders when the share prices skyrocketed and the reconstituted SEC would examine and investigate activities of 50 top companies, including Beach Hatchery, Orion Infusion, CMC Kamal, whose share values shot abnormally in 2009 and 2010.
Muhith said the probe committee had made 25 recommendations and the government had adopted 11 more issues to protect the interest of the investors of the share market.
He said that the government would implement the recommendations in three phases.
The minister said that among the 36 recommendations of the probe body and finance ministry, 11 measures would be implemented immediately which include removal of the top executives of the commission and its restructuring, stock exchange demutualisation, coordination between the stock exchanges and the SEC, measures against participation of the government and market related officials in the share business, corruption of regulatory and other officials concerned, manipulation in splitting shares’ face value and serial trading of share of Eastern Housing.
It said that the finance ministry would launch departmental cases and send files to the Anti-Corruption Commission against SEC executive director Anwarul Kabir Bhuiyan and House Building Finance Corporation general manager Kafil Uddin Ahmed for their alleged corruption as per the committee recommendations.
He said the government had already appointed a new chairman to the Securities and Exchange Commission, who would replace Ziaul Haque Khondoker, as per the committee’s suggestion.
He refused to name the newly appointed SEC chief.
‘You will know the name of the new chairman in a day or two,’ he said.
The minister said that the government would press criminal charges against individuals in two cases as identified by the probe committee.
The statement showed that the alleged traders in the two cases were Syed Sirajuddollah and his associates, Yakub Ali Khondoker and his associates and Anwar Khan who were involved in creating artificial trading environment for increasing share prices and Abu Sadat Md Sayem and his brother Abdul Mobin Mollah who were involved in serial trading. Another trader, Golam Mostafa was also involved in share price manipulation.
The government will also form a taskforce that will evaluate and monitor the reform of the capital market, including implementation of the recommendations of the probe committee.
Muhith said that the government had observed that there was lack of coordination among the agencies involved in the capital market. ‘Institutional steps will be taken for better coordination among SEC, Bangladesh Bank and stock exchanges.’
He, however, differed with the probe committee’s observation that the SEC had completely failed to perform its duties.
The government-formed probe committee, headed by Bangladesh Krishi Bank chairman Khondker Ibrahim Khaled submitted the report to Muhith on April 7.
The four-member committee was formed to probe the instability in the share market in December-January when small investors staged violent street protests.
Some newspapers and news agencies published the report after its submission.
The finance ministry posted the report on its website ( on Saturday.
The statement said the government would take 17 short-term measures for implementation in one month after the restructuring of the SEC.
The major steps include formulation of clear guidelines for preference and placement shares, thorough investigation of the role of stock exchanges in the market debacle, examining shadow accounts under the Omnibus accounts and taking appropriate action on the basis of the committee’s recommendation for making the Tax Identification Number mandatory for opening BO accounts.
The government under its medium-term action plan will take the move to amend the clause 26(2) of Bank Company Act in order to limit effectively the investment of banks in the capital market, undertake punitive actions against the banks that had invested in the capital market in 2009 and 2010 beyond the maximum permissible limit defying the directives of Bangladesh Bank and re-examine the re-evaluation of Libra Infusion, Sonali Ash Industries, Rahim Textiles, BD Thai Aluminum, Orion Infusion Ltd, Ocean Containers Ltd, Shinepukur Ceramics and Eastern Insurance.
The medium-term measures of the government will also include a three-year restriction on transfer of right shares, investigation into the SEC officials’ involvement in ‘unlawful and immoral’ approval of preference and right shares of different companies and formation of an Action Committee to identify other manipulators in the share market as well as ensuring their punishment.
The statement said the re-constituted SEC would send the cases of irregularities of BD Thai Aluminum and JEM Global to the CID police for thorough investigation. The ‘alleged’ irregularities of KPCL will be examined by a joint taskforce of the SEC, Bangladesh Bank and National Board of Revenue. Dubious share businesses of one Md Abdus Salam and another Shamima Sharif will also be investigated.


Courtesy of New Age

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