The Bangladesh Securities and Exchange Commission has
cancelled investigation against Bangladesh RACE Asset Management.
The commission issued an order in this regard on February
13, which scrapped its previous order issued on June 24, 2024 for investigating
the overall affairs of the company.
As the investigation order was withdrawn, each disciplinary
action against the firm mentioned in that order has also been cancelled.
Rezaul Karim, spokesperson and executive director of the
BSEC, told New Age that the decision to withdraw the enquiry order was made due
to two related cases currently pending in the High Court.
After the court gives its verdict on these cases, we will
take actions based on the decisions,’ he said.
Probe, against, RACE, Asset Management, cancelled, Dr. Hasan
Taher Imam, RACE, asset manager, ensures, BSEC, approximately, Tk, 700 crore,
investment, BO accounts
On June 24, 2024, the BSEC found that Bangladesh RACE Asset
Management PCL had opened and maintained multiple beneficiary owners
identification accounts in different brokerage houses instead of keeping
securities under the custody of an approved custodian as per the Mutual Fund
Rules, 2001.
The brokerage houses included Multi Securities and Services
Limited, The Smart Trades Limited and Trust Bank Securities Limited.
This raised concerns about asset security and proper
management of mutual funds.
To protect investors, the BSEC ordered the suspension of
transactions from these accounts and directed trustees and custodians to take
control of the funds.
Later on July 4, 2024, further investigations revealed that
Bangladesh RACE Asset Management PCL was conducting large-scale block
transactions between and among funds under its management.
Some of these transactions also involved the Bangladesh
Fixed Income Investment Special Purpose Vehicle, which was also under the
control of Bangladesh RACE Asset Management.
Most of such block transactions were conducted through Multi
Securities and Services Limited.
The BSEC found this practice a violation of the Mutual Fund
Rules, 2001 that prohibit asset managers from transferring securities between
mutual funds under their management.
To prevent potential financial misconduct, the commission
suspended all block transactions involving the company and required detailed
compliance reports and required detailed reports from all concerned parties.
RACE managing director Hasan Taher Imam and the then
chairman Chowdhury Nafeez Sarafat bought Multi Securities and Services
allegedly through public money invested in mutual funds managed by their RACE
Asset Management Company at significant higher rates compared with the market
prices, BSEC officials said last year.
