Stock brokers association calls for BSEC reformation; demands resignation, removal of corrupt officials

The unprofessional and unethical activities of the Bangladesh Securities and Exchange Commission (BSEC) over the last 14 years have not improved the market, rather diminished investor confidence, said the DSE Brokers Association of Bangladesh (DBA).

The association called for a massive reform in the BSEC to build a sound capital market and demanded the immediate resignation of the independent directors from the Dhaka Stock Exchange (DSE) board.

DBA President Saiful Islam placed the demands at a press conference titled "Current Situation and Future Plan of the Capital Market", held at the Dhaka Club today. DSE shareholder directors Shakil Rizvi and Richard D' Rozario, and other DBA leaders were also present at the programme.

Saiful Islam further said that no commissioner or chairman should be appointed to the BSEC based on political considerations. Additionally, to ensure good governance in the BSEC, he called for the separation of the executive department from the commission. 

The commission should focus solely on stock market policy and must not interfere with the executive functions of the BSEC, he added.

Regarding the role of DSE Chairman Hafiz Md Hasan Babu, the DBA president said the DSE remained operational despite the country's unstable environment. However, the DSE currently lacks a managing director, CEO, and chief technology officer, he added.

"In this situation,the chairman is not coming to the office, and we don't even know where he is. He is issuing various instructions regarding the operation of the DSE over the telephone from an unknown location without convening any board meetings, which is absolutely unacceptable," he said.

"Although management is separate from ownership at the DSE, the board still has some responsibilities in day-to-day operations. Furthermore, the role of the current chairman and some independent directors appointed by the commission has been questionable from the beginning," said the DBA president, demanding their immediate removal.

Saiful Islam stated that not only the DSE and CSE but also the boards of CDBL (Central Depository Bangladesh) and CCBL (Central Counterparty Bangladesh) still include individuals appointed with political affiliation. Their inexperience and short-sightedness have hampered the progress of these institutions, he added. 

"We demand that these institutions be reorganised by removing those with political affiliations and appointing qualified and experienced professionals," he said.

He also spoke about the role of BSEC over the last 14 years, from 2011 to 2024, during which M Khairul Hossain and Shibli Rubayat Ul Islam served as chairmen. 

He said, "They have turned the once orderly and promising market upside down. Many dishonest and corrupt officers within the commission were involved in these acts of maladministration and misconduct. 

"Driven by greed for positions and titles, these individuals allied with the previous commission, committing various irregularities and misdemeanours to serve their own interests, while silencing market traders. Numerous influential officials within the commission have been accused of accepting unethical payments."

The DBA president also demanded the removal of all corrupt officials from the BSEC immediately.

He mentioned that there are many dishonest traders in our market who have been exploiting and damaging the market by establishing close relations with the previous commission. 

"It is crucial to restore investor confidence in the capital market by conducting investigations and taking legal action against these corrupt individuals," he said.

"The extent of corruption and irregularities committed in the name of IPOs over the last 14 years is very alarming. Unsuitable, weak, substandard, and insolvent companies have been listed on the market through IPOs," he added.

He said that a strange rule called the "floor price" has been imposed in our market. 

"This 'floor price' hinders the buying and selling of shares, disrupting normal market transactions and investments. As an unreasonable and harmful rule, the floor price interferes with investors' freedom. Because of this rule, a large portion of domestic and foreign investors have turned away from our market." Saiful said.

The DBA president further criticised the formation of the Capital Market Stabilization Fund, questioning its legality and accusing it of defrauding investors. He demanded the closure of the institution and the return of funds to affected investors.

He also criticised past BSEC roadshows held abroad, which according to him resulted in significant foreign exchange losses rather than attracting investment. 

He called for the publication of a white paper detailing the expenses and outcomes of each roadshow.

In response to a question, Saiful Islam said, "We could not speak in the last 15 years. Instead of protesting these irregularities, we had to help them and we were forced to do it. We apologise for this."