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BSEC: Cheated clients to get money back through selling off errant brokerage firm

  • Published at 10:15 pm October 31st, 2019
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The decision was taken in a Commission meeting, held at the Bangladesh Securities and Exchange Commission (BSEC) Bhaban

The securities regulator yesterday decided to sell off the brokerage licence of Shah Mohammad Sagir & Co as the errant brokerage firm misappropriated the Initial Public Offering (IPO) subscription money from its BO (Beneficiary Owners) account holders.

The decision was taken in a Commission meeting, held at the Bangladesh Securities and Exchange Commission (BSEC) Bhaban. The meeting was presided over by Commission Chairman M Khairul Hossain.

The decision was taken according to Section 3 (1A) of the Securities and Exchange Rules, 1987, says a press release of the BSEC.

The receipts from the sale of the licence will be distributed among the deprived IPO aspirants, the release adds.

The meeting also decided to file cases against the people involved with misappropriation of the investors’ fund.

“The Dhaka Stock Exchange will be asked to take action accordingly,” said the Commission statement issued after the meeting.   

The BSEC in early October suspended the trading of the brokerage firm after receiving as many as 48 complaints from the cheated investors.

The BSEC says the stock broker faces a fund deficit of Tk1.98 crore in its consolidated customer account. 

The meeting also fined Tk5 lakh to each director of Generation Next Fashions Limited, excluding the independent ones, for violation of securities laws.

A press release of the Commission says despite several warnings for similar non-compliant activities, Generation Next Fashions failed to maintain international accounting standards in its financial statement for 2014 and 2015.

The Commission also decided to exclude the company's audit firm ATA Khan and Co. Chartered Accountants from BSEC audit panel. In addition, The Commission will send a letter to the Institute of Chartered Accountants of Bangladesh (ICAB) for action against the firm.