DSE, CSE officials milk ‘workers fund’ dry

The funds mobilised from the shareholders’ transaction and deposited in the name of ‘workers’ are being pocketed by the officers and employees who draw standard salaries from Dhaka and Chittagong stock exchanges.

Those, who work in the two stock exchanges of the country, are all officers and regular employees and not day-labourers or labours or temporary workers who are paid on basis of daily contract. However, even if there are no workers, there is a workers' fund.

The DSE came into being 54 years ago and Chittagong Stock Exchange was established for about 25 years. Even in their long journeys, the management of Dhaka and Chittagong stock exchanges could not stand on their own business.

The Dhaka and Chittagong stock exchanges are still relying on FDR interest. Even then, the officials and employees of the two stock exchanges are milking money by forming Workers Profit Participation Fund (WPPF) on that interest according to a report presented on July 12 at the DSE board meeting on the evaluation of officers and employees.

According to the Labour Act of 2006, for the welfare of the workers, a fund has to be formed with 5 percent of the company's net profit. However, due to lack of workers in banks and financial institutions, the formation of this fund was exempted. The exemption was granted on the application of the Association of Bankers Bangladesh (ABB) and with the consent of Bangladesh Bank.

However, despite the lack of workers, the fund has been set up at DSE and CSE and is being distributed regularly. It is learned that a fund of Tk 6 crore 51 lakh was formed in the last 2018-19 financial year at the rate of 5 percent profit which has been received by all 359 officers and employees of DSE. In other words, on an average, everyone has received about Tk 1 lakh 81 thousand from this fund. And a Chittagong Stock Exchange fund of Tk 2 crore 85 lakh has been received by all the 86 officers and employees at the rate of around Tk 3 lakh 31 thousand each.

A DSE member, who did not want to be named said, "We do not have any workers here. Everyone does intellectual jobs. The salary of the peons here is Tk 30-35 thousand. Even then a regular labour fund is being formed and distributed."

A CSE official told The Business Post that the workers' fund was set up in accordance with the law. There is no directive that a workers' fund cannot or should not be formed on a stock exchange. No irregularities were committed here.

Bangladesh Capital Market Investors Unity Council President Mizanur Rashid Chowdhury told The Business Post that it was very sad that the stock exchange officials were enjoying money by setting up a fund in the name of the workers’ welfare. When several million investors have become almost bankrupt due to the failure of stock exchanges including the regulatory body BSEC, they are being further looted through such irregularities. The government should take immediate action in this regard.

Professor Abu Ahmed, a capital market expert, said, “The two stock exchanges were doing so using the loopholes in the law. Officials cannot take the money saved by forming a fund in the name of the workers. It is completely immoral.”

Meanwhile, the country's main stock exchange, Dhaka Stock Exchange has hired high-paid officials and employees, but business is not improving. As a result, shareholders are not getting the benefit of demutualisation. In addition, DSE has an additional 70-80 manpower, according to the report.

It may be mentioned that till the financial year 2012-13, both the stock exchanges of the country were non-profit organisations. However, on November 21, 2013, it was demutualised and transformed into a for-profit organisation. Since the financial year 2014-15, both the stock exchanges were liable to distribute dividends.

However, as dividends had not been distributed before, it was deposited in the stock exchange. But now, even after paying as ‘B’ category dividends, no funds are left. In the beginning, DSE had to use the reserve to pay 10 percent dividend for 3 years. Even then, as there was no improvement in business, the dividend was reduced to 5 percent in the next two fiscal years, the evaluation report adds.