The Ministry of Finance has ordered an investigation into the allegation of stock market manipulation against Professor Dr Abdullah Al Mahmud, an independent director of the Dhaka Stock Exchange (DSE).
A letter concerning this matter, signed by Deputy Secretary Farida Yasmin and issued on June 25, was sent from the Financial Institutions Division (FID) under the Ministry of Finance to the chairman of the Bangladesh Securities and Exchange Commission (BSEC).
According to the letter, the investigation must be completed within 30 working days, after which appropriate actions will be taken against the accused. During the investigation, Abdullah Al Mahmud has been instructed to refrain from performing his duties at the DSE.
Recently, a national daily published a news article titled "DSE Director Involved in Stock Manipulation, the Guardian Becomes the Predator," which resulted in this investigation directive from the ministry.
The letter from the Financial Institutions Division reads, "The news article titled 'DSE Director Involved in Stock Manipulation, the Guardian Becomes the Predator' mentions that Professor Dr Abdullah Al Mahmud, a member of the Dhaka Stock Exchange's board of independent directors, illegally traded shares worth Tk 13.15 crore across three BO accounts through manipulation."
It further reads, "The article alleges that he committed three offences. Firstly, by being a board member of the stock exchange, he traded shares illegally and unethically to gain benefits. Secondly, he took advantage of trading shares of companies that were penalised for manipulation. Thirdly, he profited from trading shares by obtaining prior information about companies whose boards were dissolved with the help of the regulatory authority."
"The report claims that due to Abdullah Al Mahmud's position as a DSE independent director, he exploited confidential company information, causing a crisis of confidence in the capital market and damaging the government's image," the letter mentions.
Actions instructed in FID letter
The BSEC is to investigate the published allegations under Section 21 of the Securities and Exchange Ordinance, 1969, within the next 30 working days and take necessary actions based on the investigation report.
The Dhaka Stock Exchange must complete an investigation to determine if this independent director is engaged in activities contrary to the provisions of the Dhaka Stock Exchange (Board Administration) Resolution 2023, clauses 8(2)(A), 8(2)(B), 8(2)(D), 8(3)(1), along with other laws, rules, regulations, or directives followed by the BSEC and the DSE, and take actions based on the report.
For the sake of the investigation, Professor Dr Abdullah Al Mahmud is instructed to refrain from his duties as an independent director of DSE during the investigation period.
Based on the investigation reports from the BSEC and the DSE, the commission shall take the necessary actions immediately and inform the Financial Institutions Division accordingly.
