SEC largely responsible for stock market scam
Mohammad Mufazzal | Tuesday, 5 April 2011
Mohammad Mufazzal
The securities regulator is largely responsible for the recent stock market scam as it created opportunities for vested quarters to make their fortunes by indulging in illegal practices. This was stated by the chief of the committee, now investigating the stock market scam, Monday immediately after the completion of the report. Echoing the probe body chief Khandaker Ibrahim Khalid, another member of the committee said many persons were behind the scam, but the Securities and Exchange Commission (SEC) must be held responsible ultimately. "It was not possible for vested quarters to make the best use of illegal practices unless a section of top SEC officials allowed them to do so," Khalid told the FE. He said the regulator may argue that the failure to carry out the responsibilities of other parties concerned, including the rogue auditors, should not be imposed on the SEC. "But the regulator was supposed to cancel the applications of controversial issues. Had they done it, such a situation would not have arisen," he said. However, he said the controversial issues might have been approved through under-the-table deals. Khalid said the probe body cannot make each and every official responsible for the approval of controversial issues. "Suppose, a director can argue that he had overlooked a controversial issue following an order from his boss - Executive Director (ED). Similarly, an ED can say that he had also bypassed the issue as per the desire of his boss." "It's not possible to remove all the SEC officials. But some officials, who are mainly responsible for the market scam, should be removed for the sake of dynamic and transparent activities of the regulatory body," he said. He said the probe report will make a series of recommendations including recruitment of a chartered accountant in the office of securities regulator. The report will also recommend strengthening of the research and development (R&D) department of the SEC. Presently, the R&D department is not able to carry out its activities due to shortage of manpower. A member of the probe body dismissed a media report saying, "The report will, of course, include the names big fishes who had a played role in the scam." "The names of responsible SEC officials, individuals, companies, stakeholders will be included in the report," he said. He said the demutualisation of Dhaka Stock Exchange (DSE) is another strong recommendation to be made the probe body. "The ill practices will be reduced drastically through reforms of the SEC and demutualisation of the DSE," he said. Asked about the submission of the probe body chief said it has already been completed and they were waiting for the arrival of Finance Minister AMA Muhith from abroad. "We will submit the report to the finance minister immediately after getting his phone call," he said. The finance minister is expected to return home from France tomorrow (April 6).
The securities regulator is largely responsible for the recent stock market scam as it created opportunities for vested quarters to make their fortunes by indulging in illegal practices. This was stated by the chief of the committee, now investigating the stock market scam, Monday immediately after the completion of the report. Echoing the probe body chief Khandaker Ibrahim Khalid, another member of the committee said many persons were behind the scam, but the Securities and Exchange Commission (SEC) must be held responsible ultimately. "It was not possible for vested quarters to make the best use of illegal practices unless a section of top SEC officials allowed them to do so," Khalid told the FE. He said the regulator may argue that the failure to carry out the responsibilities of other parties concerned, including the rogue auditors, should not be imposed on the SEC. "But the regulator was supposed to cancel the applications of controversial issues. Had they done it, such a situation would not have arisen," he said. However, he said the controversial issues might have been approved through under-the-table deals. Khalid said the probe body cannot make each and every official responsible for the approval of controversial issues. "Suppose, a director can argue that he had overlooked a controversial issue following an order from his boss - Executive Director (ED). Similarly, an ED can say that he had also bypassed the issue as per the desire of his boss." "It's not possible to remove all the SEC officials. But some officials, who are mainly responsible for the market scam, should be removed for the sake of dynamic and transparent activities of the regulatory body," he said. He said the probe report will make a series of recommendations including recruitment of a chartered accountant in the office of securities regulator. The report will also recommend strengthening of the research and development (R&D) department of the SEC. Presently, the R&D department is not able to carry out its activities due to shortage of manpower. A member of the probe body dismissed a media report saying, "The report will, of course, include the names big fishes who had a played role in the scam." "The names of responsible SEC officials, individuals, companies, stakeholders will be included in the report," he said. He said the demutualisation of Dhaka Stock Exchange (DSE) is another strong recommendation to be made the probe body. "The ill practices will be reduced drastically through reforms of the SEC and demutualisation of the DSE," he said. Asked about the submission of the probe body chief said it has already been completed and they were waiting for the arrival of Finance Minister AMA Muhith from abroad. "We will submit the report to the finance minister immediately after getting his phone call," he said. The finance minister is expected to return home from France tomorrow (April 6).