BSEC directs NRB Bank to take action against CFO for stock market misconduct
BSEC issued the direction based on a report by the 3-member inquiry committee formed early November last year
The Bangladesh Securities and Exchange Commission (BSEC), has asked NRB Bank Ltd to take action against its Chief Financial Officer (CFO) Kamrul Hasan and other officials for their stock investment misconducts.
Last week, BSEC sent a letter in this regard to the bank's managing director and asked to report compliance by 28 February.
The capital market regulator issued the direction based on a report by the 3-member inquiry committee formed early November last year.
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The committee found Kamrul Hasan and some of his colleagues who were handling the bank's stock market investments responsible for some of the bank's aggressive, speculative, and unlawful investments in stocks.
In September last year, the Bangladesh Bank imposed a fine of nearly Tk50 lakh on the bank for its excessive investment in Pioneer Insurance shares.
The central bank also found that the bank bought the shares at unusually high prices despite the opportunity for buying the same shares at a lower price.
Investigators are convinced that the officials misused the bank's money to collaborate with outsider stock manipulators.
The BSEC investigation found Kamrul and his fellow investment officials at the bank guilty.
When the central bank found NRB Bank's overinvestment only in one particular insurance company stock, the bank had to sell off a part of its holding to reduce its exposure and that resulted in a realised loss.
Besides, the bank's total damage went above Tk100 crore including the unrealised loss.
NRB Bank's MD Mamoon Mahmood Shah told The Business Standard "We have been going through internal audits and investigations in this regard, and the CFO has already been suspended."
Being asked if any other officials of the bank were guilty, he said the bank was trying to differentiate between 'juniors' negligence' and 'gross misconduct.'
"We are complying with the BSEC instructions and will inform the regulator on time," he said.
He also said the bank's portfolio loss was not too big as it did not sell off all its stocks.
NRB Bank is a new generation lender which is on its way to going public.
