Share market scandal

There is pressing demand for publication of the full report of the enquiry committee on share market scandal and trial of those who are responsible for looting the money. Those who have plundered Tk 20 billion (20,000 crores) and transferred money abroad must face trial in the court. Those who have lost everything they should be compensated. Doubts have been expressed that the full report may not be published for hiding the culprits.. An influential section of businessmen and politicians, who allegedly siphoed off large sums of money from the share market, is now trying to discredit the probe committee report to avert punishment. They are also lobbying to ensure that the government agencies do not go ahead with further investigations beyond the primary findings. They have even threatened with putting the stock market through another turmoil if the government proceeds with any investigation. A four-member probe committee led by Krishi Bank Chairman Khondker Ibrahim Khaled who is also a former deputy governor of Bangladesh Bank, had prepared the report. The influential group has targeted Khondker Ibrahim Khaled who said that a quarter was hatching a conspiracy over the report Some people do not want the report's recommendations to be carried out. If these recommendations are implemented, it would be difficult to manipulate the share market in future. The small investors have demanded quick implementation of the recommendations of the enquiry committee. They are of the view that if the culprits are not punished, similar events may reappear from time to time. It is not yet clear as to when the report would be published. Market specialists have called for immediate publication of the full report. The chairman of the probe committee has added a new dimension to the debate on share-market. He said that the culprits could only be punished under martial law. The law minister has rejected this viewpoint. Prominent lawers have said this is provocative and unfortunate Khondker Ibrahim Khaled's view means lack of confidence in the judiciary. This will inspire the military rulers. According to them, military rule is never positive for democracy. But unfortunately our politicians prepare the ground for military rule. The existing legal system will be enough to try those associated with share-market scam. What is needed is the sincerity of the government. If it wants to try them, it can surely do this. But the big question is whether the government would be willing to do it. The influential circles may divert the attention of the government. The Securities and Exchange Commission (SEC) has approved a trust fund of Tk 50 billion (5,000 crores) to prop up the volatile stock market. Eight state-owned financial institutions will sponsor Tk 15 billion (1,500 crores), while the rest of the fund will be raised from institutions and individuals. The fund will be professionally-managed collective investment scheme. This fund will no doubt support the stock market but what will happen to Tk 20 billion (20,000 crores) already siphoned off from the markat. Will the 3.3 million (33 lakh) small investors (losers) get any benefit? Inspite of the declaration of the trust fund,the share market continued to fall. The fall in the share market was unprecedented. From 9,000 points it came down to below 5,000. Some have lost two-thirds of the capital, some others have lost half of the capital. The market is unlikely to reach the previous level in the near future .Many have left the market after losing heavily. The finance minister said that the report will be edited before publication. It is feared that the actual report may never be known. Restructuring of the SEC was discussed at a high level meeting on the basis of the report of the probe committee. Government had to face a difficult situation because of the failure of the SEC Chairman in controlling the market. It was decided in the meeting to ask the Chairman to leave. Some other officials may also be removed. It has not yet been decided about the replacement of the SEC Chairman. In the meantime, ten officials of the SEC were promoted. It is surprising that some SEC officials have been promoted at this difficult time of the organisation. Those who have commited the misdeeds are very influential and powerful and they have political linkages. They have used the share market by pauperising the small investors. Government have to implement the recommendations of the report and take action swiftly. Otherwise the market and the investors will suffer. The culprits of share market scandal of 1996 during the previous Awami League (AL) regime went unpunished. Many people believe that the same thing may happen this time. Only time will tell if the government will take tough action against those responsible for the scandal. This is a real test for the Awami League government. Failure to act on this issue may have long-term effect on the future of the party. The latest position is that the High Court has directed the government to publish the full investigation report on the share market debacle within a reasonable time. The court also asked the government why it should not be directed to take legal action against the people or companies responsible for the share market crash. Furthermore, it asked why the government should not be directed to recover the money from the share market and return it to the accounts of the affected investors. It would be interesting to watch the response of the government to the questions raised by the High Court. In the meantime, the share market is likely to remain subdued. .............................................. The writer is an economist and columnist. He can be reached at e-mail: syedjamaluddin22@yahoo.com