The securities regulator has formed a five-member committee to investigate irregularities in the stock market, including allegations concerning the issuance of Beximco Green Sukuk Bond and IFIC Granted Sreepur Township Green Zero Coupon Bond.
The panel will also investigate the process of selection of Bashundhara Group's ABG Ltd as the strategic partner of the Chittagong Stock Exchange (CSE).
The committee was formed at a meeting of Bangladesh Securities and Exchange Commission (BSEC) held on Sunday, with its chairman Khondoker Rashed Maqsood in the chair.
The five-member committee, led by Zai U Ahmed, founder chairman & consultant at Tera Resources International, USA, has been asked to submit the report within 60 working days.
Other member of the team are Yawer Sayeed, founder Managing Director & CEO of AIMS of Bangladesh, Shafiqur Rahman, former NBR official, Mohammad Zeeshan Haider, deputy Attorney General of the Supreme Court, and Md Anowarul Islam, executive director of BSEC.
The committee will investigate the issues related to fund collections through issuance of Beximco Green Sukuk Al Istisna'a and IFIC Granted Sreepur Township Green Zero Coupon Bond.
Beximco raised Tk 30 billion through first-ever asset-backed green sukuk in 2021 for the purpose of business expansion and the then commission of the securities regulator allowed raising of Tk 10 billion through IFIC Granted Sreepur Twonship Gren Zero Coupon Bond last year.
There are widespread allegations against Salman F Rahman, vice-chairman of Beximco Group, who had misused power by getting special facilities for raising the money from the capital market, ignoring the securities rules and regulations.
Mr Salman, who worked for Sheikh Hasina as one of her trusted advisers until the downfall of the Awami League government on August 5, was overly influential in the financial sector of Bangladesh. Mr Salman was arrested in the capital on August 13.
Mr Salman used his political power for the bond sales. No banks and institutional investors were interested in subscribing to the bonds due to lack of trust in Beximco Group.
Sreepur Township, which was incorporated in March 2023 billion, also raised Tk 10 billion through IFIC Amar Bond in July last year.
The inquiry team will also look into the process of selling 25 per cent stakes of Chittagong Stock Exchange (CSE) to ABG Limited in 2022.
ABG Limited is a concern of Bashundhara Group, a leading conglomerate in the country. ABG bought 25 per cent shares of the CSE as strategic partner worth Tk 2.40 billion, each share priced at Tk 15.
"The investigative team will look into the selection procedure of ABG Limited as CSE strategic partner, acquisition process and selling price," reads the BSEC statement.
The inquiry committee will also investigate the IPO approval procedure of Best Holdings, which raised Tk 3.50 billion from the stock market under the book-building method last year.
In 2020, Best Holdings tried to raise funds from the stock market through direct listing. However, Dhaka Stock Exchange protested the direct listing procedure, citing that Best Holdings, as a private company. can't raise funds from the capital market without initial public offerings.
The committee will also investigate the process of transferring shares of Al-Amin Chemical Industries to the SME market from the OTC market.
Cricketer Shakib Al Hasan, through his little known two firms, and his allies acquired more than 48 per cent stake from the sponsors-directors of Al-Amin Chemical Industries, a delisted chemical firm in 2022.
The committee will also investigate the share transfer process of Sonali Papers & Board Mills and other procedures, including re-listing on the main market from OTC market and stock price manipulation.
The previous commission approved the re-listing of Sonali Paper on the main board from OTC.
Sonali Paper came back to the main market of the stock exchanges and started trading from July 1, 2020, after remaining 10 years in the OTC market.
The team will also investigate any irregularities related to Fortune Shoes, Ring Shine Textile, Acme Pesticide, Quest BDC (Padma Printers Limited), Coppertech industries and Emerald Oil industries.
Fortune Shoes raised Tk 220 from the public under the fixed-price method in 2016. There was widespread allegation of the price manipulation of Fortune Shoes.
Ring Shine Textile raised Tk 1.50 billion from the stock market in early December 2019. But after listing, it could not do business properly due to numerous irregularities.
The company raised its paid-up capital from Tk 99.50 million to Tk 2.85 billion by issuing pre-IPO shares, known as placement shares, to the then sponsors, directors, and 73 external local shareholders.
However, 11 sponsor-directors and 33 external shareholders of Ring Shine did not make any payments against their allotted shares.
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