Md. Rakibur Rahman appointed CCBL director upon blurred interpretation of rules
The appointment of Md. Rakibur Rahman, chairman of the brokerage house Midway Securities, to the board of the Central Counterparty Bangladesh (CCBL), the clearing and settlement company, has run into a spot of controversy: there is a conflict of interest.
Capital market stakeholders said the appointment in CCBL board was not in line with the current rules.
As per rule 18(cha) of schedule 2 of BSEC Clearing and Settlement Rules, 2017, trading participants or its representative are not qualified for the directorship of CCBL.
This means any brokerage house or its representative cannot become the director of CCBL, they said.
Midway Securities is shareholder and TREC holder of DSE and also the depository participant of the Central Depository Bangladesh -- and Rahman is the authorised representative.
He appointed his son Ashequr Rahman as the representative of TREC to legitimise his directorship at CCBL, but Rahman is still involved, says the website of Midway Securities.
The previous board of DSE led by its immediate past chairman Abul Hashem declined Rahman’s bid to be the director of CCBL as the current rules did not let him. But the current board headed by DSE Chairman Eunusur Rahman allowed Rahman to be the director of CCBL.
Dhaka Tribune tried to contact Rahman through various ways but he remained out of reach.
DSE Chairman Rahman did not answer to phone calls from the correspondent.
Abdus Salam Sikder, chairman of CCBL and former commissioner of the Bangladesh Securities and Exchange Commission, declined to speak further on the issue.
“The appointment is in line with the securities rules,” BSEC Spokesperson Mohammad Rezaul Karim told Dhaka Tribune.
When probed on the possible conflict of interest, he declined to comment further.
Incorporated in May 2018, CCBL was established following a demand of the country's two bourses – Dhaka and Chittagong Stock Exchange -- for a joint venture company for clearing and settlement.
The company’s work is to ensure trading anonymity and make settlement operations efficiently. It will also ease the settlement problems and complexities of stock exchanges.
Currently, the settlements are done through the Central Depository Bangladesh (CDBL).
The DSE holds 45 per cent shares at CCBL, CSE 20 per cent, different banks 15 per cent and CDBL 10 per cent, while strategic investors hold the remaining 10 per cent shares.
Meanwhile on June 17 this year, the BSEC approved the 11-member board of directors of CCBL. Of the 11, seven are independent directors and four shareholder-directors.
The independent directors are former CDBL Managing Director MH Samad, former Sanofi-Aventis Finance Director Tajdiqul Islam, Chittagong University Professor Mohammed Jamal Uddin, former BASIS Director Md Mostafizur Rahaman Sohel, Dhaka University Professors Muhammad Asif Hossain Khan and Mohammad Tareq. Abdus Salam Sikder was also an independent director.
The four shareholder-directors are DSE Director Md Rakibur Rahman, CSE Chairman Asif Ibrahim, CDBL Vice-Chairman AKM Nurul Fazal Bulbul, and former MTB MD Anis A Khan.