DSE body to probe independent director’s share trading

The Dhaka Stock Exchange (DSE) has formed a three-member committee to probe allegations of share trading by an independent director of the bourse.

The probe committee will submit a report to the board after investigating the allegations within seven working days, as decided by the DSE in its board meeting on Wednesday.

The three members of the committee are Rubaba Dowla and Kawser Ahmed, both independent directors, and Sharif Anwar Hossain, a shareholder director on the DSE board.

According to the DSE, these team members also serve on the Conflict Mitigation Committee (CMC) of the bourse, which was formed following the stock exchange demutualization scheme. Brigadier General M Imran Hamid chairs the Conflict Mitigation Committee.

The demutualization scheme emphasises the avoidance of conflicts of interest among board directors. It states, "No director of the board or any committee of the exchange shall participate in any decision-making or adjudication process in respect of any person or matter in which he is in any way, directly or indirectly, concerned or interested."

Furthermore, it restricts directors from engaging in business transactions with the exchange except those related to securities trading, with final decisions on conflicts of interest resting with the Conflict Mitigation Committee.

Concerns have been raised about transparency and accuracy in the investigation process, as sources seeking anonymity suggested it might be more appropriate to handle the matter through the Conflict Mitigation Committee.

Allegations were raised against Professor Abdullah Al Mahmud, an independent director from the University of Dhaka's banking and insurance department, regarding share trading while serving as chairman of the Nomination and Remuneration Committee (NRC) of the DSE board.

Responding to questions about these allegations, Abdullah Al Mahmud explained to The Business Standard, "Shares were bought and sold before my appointment as an independent director on the DSE board. After joining the board, some shares were sold following all procedures and rules of the stock exchange."

In a related development, the Bangladesh Securities and Exchange Commission (BSEC) wrote to the DSE last November, instructing it to refrain from sharing sensitive market reports and analyses with its board of directors, citing potential conflicts of interest.