BSEC chairman quits after fall of Hasina-led govt
Shibli, who joined the commission in May 2020, faces a slew of allegations, including resorting to autocratic practices, facilitating market manipulators, and approving companies with poor fundamentals to raise funds from general investors.
Shibli Rubayat-Ul Islam, an active member of the pro-Awami League Blue Panel at the University of Dhaka, has ended his premature tenure as the chairman of the Bangladesh Securities and Exchange Commission (BSEC) just five days after the fall of the Sheikh Hasina-led government.
Shibli, who joined the commission in May 2020, faces a slew of allegations, including resorting to autocratic practices, facilitating market manipulators, and approving companies with poor fundamentals to raise funds from general investors.
The banking and insurance professor, who was reappointed on 28 April this year for a second four-year term, resigned on Saturday night citing personal reasons, just four months after his reappointment.
Earlier, Md Ziaul Haque Khandker was forced to step down without completing his tenure as BSEC chairman following the stock market crash in 2010.
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Over the phone, Shibli Rubayat told The Business Standard, "I have resigned from the post of chairman of the BSEC for personal reasons. In this regard, I sent an email to the Financial Institutions Division."
Prior to his resignation, he was abroad from 28 to 31 July for official purposes. Although he returned to the country on 4 August, he did not rejoin the commission, according to BSEC officials.
Before joining the BSEC, Shibli Rubayat served as chairman of the Sadharan Bima Corporation, a state-owned general insurer. He also previously held the position of treasurer of the Dhaka University Central Students' Union (DUCSU).
Meanwhile, Mohsin Chowdhury, a BSEC commissioner, took charge as chairman (current charge) on Monday, according to a letter from the Financial Institutions Division.
On 8 May this year, he was appointed commissioner of the BSEC for four years. Earlier, he retired from the post of Director General of the Bangladesh Employees Welfare Board in July 2023.
Steps and allegations
During the COVID-19 pandemic, after assuming the position of chairman for the commission, he took several steps to improve the market, including restructuring the boards of various companies, making it mandatory for sponsor-directors to hold 30% of the shares, and reviving companies that had been inactive for years.
Allegations against Shibli Rubayat's commission include that more than 50 weak companies were given the opportunity to raise funds from the capital market through initial public offerings (IPOs), resulting in losses for general investors.
The commission is accused of not taking strict action against share manipulators. Instead, during his tenure, it allegedly allowed certain influential market circles to engage in manipulation. Market participants have also complained that the manipulation cycle has faced only nominal punishment.
In 2020, a regulation was introduced requiring sponsor-directors of listed companies to hold a minimum of 30% of shares. However, this regulation was not implemented despite extensions over time.
Stock exchanges are the primary regulators of the capital market, responsible for overseeing companies' compliance with listing rules. The commission is also criticised for undermining the independent authority of the stock exchanges.
After Shibli Rubayat took charge, the board of directors of about two dozen companies was dissolved, and new independent directors were appointed by the regulator.
When entrepreneurs from some companies fled after raising capital, those companies ceased production. To revive these companies, ownership was transferred by allowing the old entrepreneurs to sell their shares to new investors.
The commission also provided several benefits to the new entrepreneurs. Despite this, the commission did not take action against the non-functional companies' irregularities.
It should be noted that the commission established a separate SME platform for small-cap companies, as well as an ATB Board and a platform for government Treasury bill and bond transactions.
The Capital Market Stabilisation Fund (CMSF) was formed using undisbursed dividends from shareholders in various companies over the years.
However, the central bank raised objections regarding the formation of this fund. As a result, around 100 companies, including banks, insurance firms, and non-bank financial institutions, have not deposited their dividends into the CMSF.
