High-level committee devises plan to revive market

The newly-formed high-level committee to strengthen the securities regulator and help the capital market flourish has started working by identifying challenges and potential development methods.

It held its first meeting on Thursday and devised a work plan to prepare policy recommendations for reviving the struggling stock market.

"We have discussed terms and reference (TOR) at the first meeting," said Ms. Farzana Lalarukh, a commissioner of the Bangladesh Securities and Exchange Commission (BSEC), also member-secretary of the committee.

The government formed a four-member panel two days back [Tuesday] led by Dr. Anisuzzaman Chowdhury, special assistant to the chief adviser for the finance ministry affairs.

Other members are Prof M Sadiqul Islam, a faculty member of the finance department of the University of Dhaka; Md Sayed Kutub, additional secretary of the insurance and capital market department of the FID, and BSEC Commissioner Farzana Lalarukh.

The committee was formed in response to a request from the BSEC to the Financial Institutions Division (FID) under the Ministry of Finance to investigate the March 5 chaos when BSEC officials confined the commission's Chairman Khondoker Rashed Maqsood and three commissioners to press home their demands.

As per the terms and reference (TOR), the panel will recommend how to strengthen the regulatory and monitoring activities of the stock market, attract domestic and foreign investments, and stabilise the capital market.

The panel will also provide suggestions as to how to increase liquidity in the market, improve corporate governance, and create a favourable environment for new companies to enter the secondary market.

Recent chaos at BSEC

On March 5, an unprecedented incident occurred at the office of the market watchdog when some unruly officials locked the chairman and three commissioners in a meeting room in protest against the forced retirement of a executive director.

BSEC employees forcibly entered the meeting room, and shut down electricity supply and closed-circuit television (CCTV) cameras, holding the top brass hostage for nearly four hours. That created a sense of terror and chaos.

Army personnel then intervened and rescued the hostages. The same day, the BSEC chief's bodyguard filed a case, accusing 16 officials of creating the hostile situation.

Upon discussions with the finance ministry, the chairman and commissioners returned to their office next day [March 6]. At a press briefing, Mr Maqsood reaffirmed that he would continue discharging his duties that he had been entrusted with by the government and that he will not bow to any pressure and will take actions against irregularities in the capital market.

The disgruntled officials later withdrew their strike and rejoined work.

BSEC's letter to FID

On March 10, the BSEC chairman wrote a letter to the Financial Institutions Division (FID) with several proposals. In the letter, he detailed the March 5 incident and urged the FID to take action to restore discipline in the capital market.

To establish a chain of command at the BSEC, the incident should be thoroughly investigated, and appropriate recommendations should be made, reads the letter.

For this purpose, the BSEC urged the formation of a high-level investigation committee led by the FID.

Strict legal action is necessary against those involved in acts of violence and sabotage, the BSEC chief said in the letter, adding that collaboration between the FID and the BSEC is imperative for structural reforms within the BSEC.

The securities commission also proposed hiring armed Ansar men for the protection of critical infrastructure and suggested forming a high-level investigation committee to take action against those involved in violence and sabotage.

Moreover, the BSEC sought 19 government officials on deputation, with degrees in economics, finance, commerce, accounting, statistics, mathematics, law, and information technology to avoid full dependency on its own staff, improve the quality of its work, speed up processes, and maintain secrecy.

Three of them may join as executive directors, three directors, one commission secretary, and 12 at the joint or additional director level at the BSEC, according to the letter to the FID.

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