Premier Bank IPO: 2436 BO accounts frozen
FE Report | Monday, 2 June 2008
The Securities and Exchange Commission (SEC) has temporarily frozen 2436 beneficiary owners' accounts (BO) 'deemed fictitious' as they were opened in different branches of Al-Arafah Islami Bank using the same address when the Premier Bank floated its IPO.
The subscription of Premier Bank IPO took place in March of 2007 after it was earlier cancelled for BO account forgery in February 2005.
The securities regulator in cooperation with the central bank analysed various documents and data of those BO accounts and primarily identified that the accounts were not opened in line with the securities rules during Premier Bank initial public offering (IPO), making the commission suspicious, a SEC spokesman told reporters after the meeting held on Sunday.
"The BO accounts will remain frozen until further notice but credit can function and the account holders already in possession of shares will land in trouble if irregularities are proved against them," said Farhad Ahmed, executive director of the SEC.
He said, during the Premier Bank IPO, the BO account was opened using the address '137, Tejgaon Industrial Area, Dhaka' under different branches of Al Arafah Islami Bank.
"The enforcement department of the SEC will summon those account holders to hear further," Farhad said adding that these steps will act as deterrent for those who will intend to do so in future.
He said, if their involvement are found unlawful, they might face two types of punishment- civil or criminal cases. Under the civil case, the maximum financial penalty is Tk 1.0 million and under the criminal case, the maximum financial penalty is Tk one million or five-year imprisonment or both, he added.
Currently, there are around 15 million BO accounts in the country's stock market.
The subscription of Premier Bank IPO took place in March of 2007 after it was earlier cancelled for BO account forgery in February 2005.
The securities regulator in cooperation with the central bank analysed various documents and data of those BO accounts and primarily identified that the accounts were not opened in line with the securities rules during Premier Bank initial public offering (IPO), making the commission suspicious, a SEC spokesman told reporters after the meeting held on Sunday.
"The BO accounts will remain frozen until further notice but credit can function and the account holders already in possession of shares will land in trouble if irregularities are proved against them," said Farhad Ahmed, executive director of the SEC.
He said, during the Premier Bank IPO, the BO account was opened using the address '137, Tejgaon Industrial Area, Dhaka' under different branches of Al Arafah Islami Bank.
"The enforcement department of the SEC will summon those account holders to hear further," Farhad said adding that these steps will act as deterrent for those who will intend to do so in future.
He said, if their involvement are found unlawful, they might face two types of punishment- civil or criminal cases. Under the civil case, the maximum financial penalty is Tk 1.0 million and under the criminal case, the maximum financial penalty is Tk one million or five-year imprisonment or both, he added.
Currently, there are around 15 million BO accounts in the country's stock market.