Bangladesh Securities and Exchange Commission (BSEC) on Tuesday formed a committee to investigate the irregularities involving Chowdhury Nafeez Sarafat, a prominent figure in the banking and stock market sectors, and his family-owned asset management company Strategic Equity Management Limited (SEML).
The three-member committee is headed by Mohammad Amdadul Hoque, an additional director of the capital market regulatory body. The other two members are Deputy Director Rafiqunnabi and Assistant Director Mohammad Abu Hena Mostafa.
According to BSEC sources, Nafeez has allegedly siphoned off hundreds of crores of taka from Padma Bank under the name of SEML. More than Tk 200 crore was transferred from Padma Bank to this company under the guise of alternative investments.
Later, the funds were invested in other companies owned by Nafeez. Through this method, funds from Padma Bank were misappropriated via the asset management company.
The probe committee has been tasked with examining the use of funds in the company under the guise of alternative investments and investigating any related irregularities.
The committee has been instructed to submit a report to BSEC within 60 working days, according to a BSEC notification.
The capital market regulator said that the committee would verify investment information related to the alternative investment fund of SEML, alongside ensuring compliance with relevant laws and regulations during the investment process.
Additionally, the committee will gather and scrutinise evidence related to the investments, investigate any potential conflicts of interest, review updated bank account information regarding the fund, and determine how much interest was earned on deposited funds and what profit was generated from investments in various institutions.
The probe will collect and analyse valid evidence of dividend/capital gain received from investments in listed securities and non-listed securities since inception to the present date, and analyse and report operating expenses of the fund including BSEC annual fee, management fee, trustee fee and other fees of the fund since inception to present date.
Furthermore, the investigation committee will look into any possible irregularities concerning the alternative investment fund of the asset management company.
SEML was registered as an asset manager with BSEC in 2023. Four mutual funds are under the management of this company, with a combined initial size of Tk 323 crore. Two of these funds, worth nearly Tk 175 crore, have Padma Bank-related entities as sponsors.
Nafeez was also the Padma Bank chairman for an extended period and funds were transferred from one institution tied to his interests to another under the pretext of investments.
BSEC sources revealed that Nafeez personally benefited by misusing the funds from various funds managed by Strategic Equity Management. However, due to his influential status as a pro-government figure during the past Awami League regime, neither BSEC nor any other agency could take action against these irregularities.
After the political change following the student-led mass uprising on August 5, various agencies, including BSEC, began investigating many allegations of corruption and irregularities against Nafeez.
The BSEC investigation committee will also obtain evidence concerning illicit payments (if any) out of bank accounts of the fund to the benefit of the fund manager and other parties from the inception to the present date.
It will report on the role of the fund manager and trustee in the governance and oversight of the fund in compliance with relevant rules and constitutive documents and any other matters as required by the enquiry officers.
