33,815 false applications detected against recently concluded 3 IPOs

Kayes M SohelbrA total of 33,815 false applications have been detected against the recently concluded lotteries of the three initial public offerings (IPOs) - ICB AMCL Second NRB Mutual Fund, Grameen One Scheme Two and First Security Bank Limited, sources said.brUnder the securities rules, an applicant is allowed to lodge two applications, one individually and the other jointly, for getting allotment of shares of the IPO.brBut thousands of applicants filed more than two applications using fake bank accounts and without giving bank details, breaching the securities rules.brA total of 31,815 false applications, of which 30,515 of Resident Bangladeshis and 1300 Non Resident Bangladeshis, worth Tk 160 million have been received by the Grameen One Scheme Two.brAround 1200 applications of ICB AMCL Second NRB and 800 applications of First Security Bank Limited have been detected as also false, sources concerned said.brThis is clear violation of the securities rules but considering the interest of a number of small investors and fearing repercussion in the stock market the Securities and Exchange Commission (SEC) has waived the invalidated duplicate IPO applicants from the condition of forfeiture, a source in the SEC said.brThe commission also decided that refund warrant will be issued to the applicants concerned.brHowever, the SEC warned that this time the securities regulator has shown tolerance for the sake of small investors' interest and the stock market as well, a high official of the SEC said.brBut the commission will take stern action against offenders in future as per securities rules, he warned hoping that the applicants would refrain from any such illegal and unethical practices in the future.brUnder the rules, if any applicant lodges more than two applications, the IPO application money will be forfeited.brThere are ample scopes for lodging false IPO applications in the manually refund warrant system, the experts said adding that it has become an endemic in the last three years.brThis malpractice will be eliminated gradually as the securities regulator has recently changed the refund warrant system in which the fund of the applicants are returned directly to their individual bank accounts, they added.brThe commission should not be magnanimous for ever because it is a criminal offence as per securities rules, said Yawer Sayeed, managing director and chief executive officer of AIMS of Bangladesh Limited, an asset management company.