The government has instructed the state-owned Investment Corporation of Bangladesh (ICB) to take departmental actions against its four high officials, who were found involved in illegal share market activities in a recent probe report.

Besides, it has also asked the Securities and Exchange Commission (SEC) to execute the eight recommendations including a ban on share business by the staff of ICB, merchant banks and brokerage houses to check market manipulation.

The Banking Division of the finance ministry gave the instructions on Tuesday to the SEC Chairman M Khairul Hossain and ICB Managing Director M Fayekuzzaman through issuing letters, SEC sources said.

Earlier, the government formed a three-member investigation committee on July 24, 2011, to probe into the alleged share market manipulation by nearly 800 high officials and employees of the state-owned ICB and its subsidiaries through involving themselves in share trading.

Managing director and chief executive officer of Sonali Bank Limited Humayun Kabir was made chairman of the probe body. The committee handed over its report to Banking Division secretary Shefiqure Rahman Pathwari last week.

Out of the four alleged officials of ICB, three have traded shares worth more than Tk 3 million each through Dhaka and Chittagong stock exchanges in past three years, which the report suggested were abnormally high.

The other alleged officials of ICB are-Deputy General Manager (Account and Finance Wing) Nasir Uddin Ahemd, and senior officials Mohammad Abdul Latif, Jahrul Islam Khan and Mohammad Afsan Ali. Among the alleged, Mohammad Afsan Ali hid his profession in his Beneficiary Owner (BO) account and mentioned his as a businessman by profession, said the report.

According to the letter to ICB, the government will take department action against the deputy general manager of ICB, Nasir Uddin Ahmed, as per government disciplinary rule.

The report said, ICB senior official Mohammad Abdul Latif traded share worth more than Tk 3 million on the secondary market through the account of his wife Israt Jahan.

Talking on the issue, the Banking Division secretary said they had already asked the concerned authorities to take departmental actions against the officials as per their recruitment rules.

If necessary, Anti-Corruption Committee will also take action against the corrupt officials, he added.

Officials of ICB, however, told daily sun that names of many of its higher officials were not mentioned in the report though they were involved in illegal share trading.

They also said some share market manipulators of ICB were even promoted to higher positions in last two years.

In their report, the committee also suggested that the authorities take tax identification number as well as national identification number of the omnibus and BO account holders.

The Central Depository Bangladesh Limited and regulatory authorities should maintain an automatic system to supervise the omnibus accounts. Required software should be developed for the job, the report added.

About the softwares used by different brokerage houses and merchant banks, the committee also suggested that concerned authorities should endorse softwares of those institutions before they are used.

It also said all the merchant banks and brokerage houses should have their own credit manuals, which should be approved by the SEC. The ICB, merchant banks and brokerage houses should follow the approved credit manuals for providing with credits to their clients.

When contacted, former finance advisor to a caretaker government Dr AB Mirza Azizul Islam told daily sun that the report was a good move for the stock market.

Transaction quality of the bourses will be improved if the recommendations are executed properly, he added. At present a total of 40 merchant banks and more 300 brokerage houses operate in the country.

Earlier, the Ibrahim Khalid-led share market scam probe committee has also suggested further investigation into the ICB’s omnibus accounts. The report also alleged ICB's former Deputy General Manager Kafiluddin Ahmed Chowdhury involved in in share market scam.

At the end of May last year, the Banking Division also asked the share market regulator to carry out further investigations into 14 different areas of the capital market to find out irregularities.

The Daily Sun/Bangladesh/ 26th April 2012