UFSL may face the music

The Bangladesh Securities and Exchange Commission (BSEC) has taken several steps against Universal Financial Solutions Limited (UFSL) following an investigation over the alleged embezzlement of Tk 235 crore from four mutual funds.

According to sources at the BSEC, the investigation revealed that the asset manager allegedly embezzled Tk 235 crore from four mutual funds it managed through fake investment documents and unnamed fixed deposits in banks.

Of the amount, UFSL laundered Tk 170.69 crore, according to a report of the BSEC enquiry committee submitted on January 30.

The company also reportedly provided misleading information to its mutual fund unit holders.

Based on the findings, the BSEC has asked the company to explain why its registration would not be cancelled.

The commission also plans to file a case accusing the asset management company’s managing director, directors, officers and employees under the Prevention of Money Laundering Act 2012.

Trustee of Funds, the Investment Corporation of Bangladesh (ICB) will act to recover laundered funds and unaccounted money.

Officers in the Trustee and Custodian Department of the ICB will be penalised for failure to perform their duties.

Furthermore, the BSEC will take action after a special audit against ICB officials involved in the process.

The BSEC will send an investigation report to the Financial Reporting Council for taking action against the auditors of the four mutual funds. The firms and all their partners will be banned from conducting audit and assurance activities until the matter is resolved.

The UFSL manipulated financial accounts and produced fake bank statements of FDRs, false investments in commercial papers, and doctored bank balance statements, according to BSEC officials, beginning in 2016.

The four funds from which the UFCL embezzled money are the UFS-Bank Asia Unit Fund, the UFS-IBBL Shariah Unit, the UFS-Padma Life Islamic Unit Fund, and the UFS-Popular Life Unit Fund.