Share settlement firm denies DSE’s request to halt inflated purchases

Central Counterparty Bangladesh Limited (CCBL), established to manage share settlements and enhance the payment system, has declined the Dhaka Stock Exchange's (DSE) request to suspend its procurement activities. 

CCBL communicated its stance in a letter sent on 18 December in response to a 10 December request from DSE Chairman Mominul Islam to CCBL Chairman Maj Gen (retd) Wahid-Uz Zaman. The request followed shareholder concerns about procurement practices.

CCBL stated in its reply that the suspension request was not "legally tenable." 

It emphasised that it operates independently, as mandated by the Bangladesh Securities and Exchange Commission (Clearing and Settlement) Rules, 2017, with most directors being independent and approved by the securities regulator. 

The company also noted that shareholders holding 55% of its stake, including the Chittagong Stock Exchange 20%, the Central Depository of Bangladesh 20%, and 12 banks 15%, had not raised similar concerns.

The DSE holds a 45% stake in CCBL. 

On 3 December, representatives of the DSE Brokers Association (DBA) raised serious concerns about CCBL's procurement practices and other activities during a meeting with the DSE board. They recommended suspending all procurement processes until a thorough review was conducted.

CCBL refuted allegations of inflated and unnecessary procurements, calling them "unkind" and pointing out that all decisions were made at the board level with participation from DSE-nominated directors. 

It argued that delays in commencing operations were unrelated to its capabilities or transparency and asserted that it had maintained the highest level of transparency since inception.

Regarding the non-publication of quarterly financial reports, CCBL explained that it shares annual financial statements with shareholders within the stipulated time frame before the annual general meeting and that quarterly financial reporting is not a legal requirement.

The DSE also called for a meeting between its directors and CCBL to review the situation. In its reply, CCBL expressed its willingness to engage in professional discussions with stakeholders at any time.

Saiful Islam, president of the DBA, stated that the next steps would be discussed with the DSE board following CCBL's response.