Regulator to look into loan irregularities by KHB Securities

The Bangladesh Securities and Exchange Commission (BSEC) has begun looking into alleged loan irregularities at KHB Securities Limited.
Abul Kalam, spokesperson for the market watchdog, said the inquiry committee would determine whether any operational irregularities had been committed at the brokerage firm. The commission will take appropriate measures if any violation of securities rules is identified.
An earlier inspection at the brokerage firm detected some mismatches in its financial statements. On this basis, the inquiry committee was formed.
The three-member probe body will examine whether there were unsecured loans, unverified investments, and instances of non-compliance with corporate filing requirements.
The probe order issued by the BSEC has already been sent to the managing director and chief executive officer of KHB Securities.
The commission has particularly taken note of an allegation that KHB Securities received an unsecured loan of Tk 80 million from International Leasing & Financial Services Ltd (ILFSL) without any formal agreement, a violation entailing significant financial and regulatory risks.
During the previous government's tenure, the capital market saw hardly any disciplinary action against brokerage houses accused of violations. However, the newly reconstituted BSEC, under the leadership of Khandaker Rashed Maksud, has taken steps against brokers, particularly those with deficits in consolidated customer accounts.
The probe must be completed and a report submitted within 60 working days from the order issuance date-November 16.
The FE correspondent failed to reach the managing director of the brokerage house for comment by phone despite repeated calls.

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