SEC proposes formation of JIT to probe share mkt manipulation

Nazmul Ahsan The Securities regulator has proposed to the Ministry of Finance (MoF) to form a Joint Inspection Team (JIT) soon to oversee the malpractice and manipulation in the stock market. The proposed team will comprise representatives from Securities and Exchange Commission (SEC), Bangladesh Bank (BB), Dhaka Stock Exchange (DSE) and Detective Branch of Police, said the proposal. An Executive Director of SEC will head the JIT, the proposal of SEC added. The officials in the MoF said the formation of the JIT including its proposed Terms of Reference (ToR) will soon be approved as the proposal has been made in line with the recommendations of the probe committee, headed by former BB Deputy Governor Khondker Ibrahim Khaled. Meanwhile, Finance Minister AMA Muhith on Wednesday approved the proposal for an extension of the duration of a probe committee investigating alleged corruption and manipulation of staffs employed in Investment Corporation of Bangladesh (ICB) and its subsidiaries in share market. The Committee will have to complete its investigation on ICB at the latest by December 25 this year, a high official said. The MoF formed a probe committee on ICB in July last asking it to complete investigation against all staffs of ICB and its subsidiaries within one month. However, no progress has so far been made in this connection, it is alleged. The three-member Committee, headed by Sonali Bank Ltd managing director Humayun Kabir also included representatives from BB and Banking and Financial Institution Division, MoF. The formation of the probe committee was followed by recommendation from the probe committee formed earlier in this regard, a high official in the finance ministry said. The probe committee in its report, submitted to the government in January last, said retail investors lost at least Tk 200 billion to some dishonest traders, who operated in collusion with the high ups in the stock market. Presently, there are about 800 staff members including high officials and employees with the state-owned ICB and its subsidiaries. A high official in the finance ministry said, the probe committee has been given two more months till December 25, this year to probe into the alleged involvement and corruption of ICB staffs in recent share market crash. On JIT, the official said the proposed team will collect data and relevant information from brokerage houses and merchant banks to detect irregularities, if any, either by individual or investing entities in plummeting share prices. "The free fall of share prices might be a designed game by some quarters who are opportunists. The JIT will be active against any misdoing from any quarter in terms of abnormal rise or extreme downfall of share prices," a top MoF official told the FE on Wednesday. He said all recommendations made by Khaled Committee on capital market would be implemented in phases to avert controversy. He, however, said the present situation is not appropriate for any stern action against suspected individuals or companies in share market scam.