Home Bank & Finance Seven directors of Banco Securities fined Tk 7 cr
Bank & Finance - Corporate - August 11, 2023

Seven directors of Banco Securities fined Tk 7 cr

Zarif Mahmud: Seven directors of the main stock market Dhaka Stock Exchange (DSE) brokerage House Banco Securities have been fined Tk 7 crore.
The convicted persons are – Banco Securities Chairman Abdul Muhit, MD Samiul Islam, Director Md. Shafiul Azam, Waliul Hasan Chowdhury, Nurul Ishan Sadat, A Munim Chowdhury and Jamil Ahmed Chowdhury. Each of them has been fined Tk 1 crore and a total of Tk 7 crore.
Bangladesh Securities and Exchange Commission (BSEC) has recently taken such a decision on allegations of cheating investors and violating securities regulations.
The board of directors of Banco Securities has been accused of embezzling Tk 66.60 crores in cash and another Tk 60 crores by selling shares. Directors of the company embezzled about Tk 126.60 crore by selling cash and shares. The case filed by the Anti-Corruption Commission (ACC) on the allegation is pending in court. However, the brokerage house has been accused of violating various securities laws. In view of that complaint, considering the overall aspect, BSEC decided to impose a fine of Tk 1 crore on each director and a total of Tk 7 crore.
According to BSEC’s decision, every director of the company will have to pay a fine of Tk 10,000 per day if they fail to pay this amount. Besides, it has been decided to send a letter to the ACC to know the progress of the ongoing case in the court.
BSEC Chairman Professor Shibli Rubaiyat-ul-Islam told the media in this regard, ‘There are many complaints against Banco Securities. These fines are for violations of securities laws. We have given the case of embezzlement of large amount of money against them to the ACC. ACC can take other measures including confiscation of property of accused persons, we cannot. It is ongoing.
Earlier, in 2021, DSE filed a complaint against Banco Securities and its seven directors in connection with the embezzlement of a large amount of money and shares in Motijheel police station of the capital. They were charged under Sections 406 and 409 of the Penal Code Act, 1860 for embezzlement by fraudulent breach of trust. Later Motijheel police station forwarded the complaint to ACC.
According to DSE’s complaint, on May 6 and June 6, 2021, the bank failed to settle share transactions in violation of securities laws. DSE conducted a special inspection in the company on June 7. At that time, DSE found a deficit of Tk 6659 lakh 19 thousand 133 in the combined customer account of the brokerage house as of June 6. As a result, immediately DSE receives from the company the ‘Customer Payable Reconciliation Statement’ of the deficit in that combined customer account.
It appears that Banco Securities and its owners embezzled huge amounts of money and shares from investors. And there is a danger that they will run away from the country without coordinating this money. Such activities of the company have damaged the image of the capital market. Also making common investors panic about the safety of their investments. Directors and Officers/Employees of Banco Securities have committed the crime of misappropriating huge amounts of money by breaching the trust of investors.
In view of this complaint, the absconding chairman of Banco Securities Limited, Abdul Muhith, was detained by the Immigration Police of Hazrat Shahjalal International Airport on July 29. Later, on June 30, the investigating officer of the case, Assistant Director of ACC, Atiqul Alam, presented the accused in the court and requested to keep him in jail.
In view of the application, the court of Dhaka Metropolitan Senior Special Judge KM Imrul Kaish ordered to send him to jail. He is currently on bail.
Meanwhile, in view of DSE’s application based on that incident, the central bank seized the bank accounts of 10 institutions related to the directors of Banco Securities on July 5 of that year. Bank accounts of the companies that have been seized are Banco Securities, Banco Finance and Investment, Subra Systems, Subra Fashions, Banco Power, Banco Energy Generation, Banco Smart Solutions, Classic Food Lab, Amulet Pharmaceuticals and Summit Properties Limited.
Two years have passed since the embezzlement, but Banco Securities remains closed. Investors have already transferred shares from the company to other brokerage houses through link accounts.
However, investors whose cash and share sale proceeds have been misappropriated are still in limbo.

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