BB unveils gross irregularities in Southeast Bank

ACC to file suit soon

Staff Correspondent : The Central Bank has foiled an initiative of Southeast Bank to suck huge amount of profit humiliating the share market. Which are allegedly Southeast Bank practices earlier several time and gained huge profit, depriving the individual and institutional clients. It is one of the causes of ‘loosing confidence’ on the share market.
The Southeast Bank wanted to give a loan of Tk 100 crores to United Securities Company for the purchase of shares. Bangladesh Bank has blocked and has unveiled gross irregularities after an investigating the loan proposal as the process of presenting and passing it in the board meeting of the bank is not transparent. The central bank said tougher action will be taken for the gross violation of ethics and code of conduct of banking.
It is known that Southeast Bank has been investing in the stock market through a brokerage house. The bank wanted to give a loan of Tk 100 crores to another brokerage house (United Securities) for investment in the stock market. (See Page-2)
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Southeast Bank decided to invest through United Securities despite the objection of one side of the bank’s board of directors. Bangladesh Bank stopped discount or share purchase in favor of that securities company after receiving conflict and complaint from both sides of the board of directors on the matter. At the same time, the Central Bank has started a detailed inspection on the investment of Southeast Bank in the stock market.
According to central bank sources, the investigation team has looked into why Southeast Bank is directly buying and selling shares through other brokerage houses despite having its own merchant bank.
It intents to allure share market to buy some ‘weak company shares’ which it will bought earlier and manipulate the market, the sources of BB told Daily Industry.
Apart from this, it is being investigated whether the bank is following the rules of investment in the capital market, whether any directors or their related organizations or anyone personally benefited by selling the bank’s shares. Apart from this, in 2018, EM Power invested Tk 22.5 crore in the company’s private placement.
Bangladesh Bank’s Offsite Supervision Department objected to that investment in 2021 as it was suspicious. Bangladesh Financial Intelligence Unit (BFIU) found evidence of illegal transactions by investigating these suspicious investments. Later, BFIU sent the report to the Anti-Corruption Commission for taking legal action. A central bank team is also inspecting these issues. At the end of the entire investigation process, the investigation team has found gross irregularities and they will submit a report to governor Abdur Rauf Talukdar and Bangladesh Bank will take action based on that investigation report.
The ACC sources told Daily Industry that they are going to file legal suit very soon against the irregularities done by Southeast Bank.
In this regard, Bangladesh Bank Executive Director and Spokesperson Majbaul Haque said the board of directors of Southeast Bank approved a proposal of Tk 100 crore to buy shares from a securities company. That loan was risky. Apart from this, we have received some complaints against Southeast Bank regarding investment in the stock market. Investigation conducted on the basis of these allegations.
It is known that the Chief Operating Officer of United Securities Company, Rajeev Al Mamun, applied to the Managing Director of Southeast Bank for a fund of Tk 100 crore on January 23 of this year. As a ‘premium client’, Southeast Bank will be charged a special brokerage commission charge of only 25 paise for every Tk 100 share purchase including all expenses. Later, when the proposal was raised in the board meeting held on February 20, it was approved. However, no amount has been mentioned. Investment in the stock market is allowed only through United Securities.
Those concerned said that a party including the chairman of the bank, Alamgir Kabir, has asked that, from now on, most of the bank’s investments in the capital market will be managed through United Securities.
Which is currently being invested through other companies. Bangladesh Bank wrote a letter to Southeast Bank on February 25 when Bangladesh Bank received a complaint about this. In the letter, Bangladesh Bank instructed not to release any money in favor of United Securities and not to buy any shares. At the same time, a special investigation by the central bank done in Southeast Bank since February 25.
Daily Industry correspondent has called Southeast Bank Chairman Alamgir Kabir and Managing Director Nuruddin Md. Sadek Hossain and PRO Tanveer to mobile phone but did not get a response.
The central bank source told that earlier Southeast Bank has conducted several scams, which will be investigated. Daily Industry got some evidence of loan scams done by Southeast Bank in the recent months, will be published a series of reports.