HC seeks BSEC explanation for Tk158cr mutual fund embezzlement
The High Court on Monday asked for the securities regulator's explanation regarding the reported embezzlement of Tk158.37 crore from four mutual funds by asset manager Universal Financial Solutions (UFS).
The state-owned Investment Corporation of Bangladesh (ICB) has also been asked to submit its explanation within 30 days. The ICB was the trustee and custodian of the four mutual funds.
The HC bench of Justice Md Nazrul Islam Talukder and Justice Khizir Hayat further issued a rule asking the authorities to show cause why their inaction to stop the UFS managing director from fleeing the country would not be declared illegal.
It also asked that the media report by the Daily Jugantor journalist Munir Hossain on the embezzlement be authenticated.
Md Khurshid Alam Khan, who appeared for the Anti-Corruption Commission, presented the newspaper report before the HC, while Deputy Attorney General AKM Amin Uddin Manik represented the state.
According to the Jugantor report on 1 January, the Bangladesh Securities and Exchange Commission (BSEC), in its primary investigation, found that UFS Managing Director Syed Hamza Alamgir embezzled a huge amount of cash from four mutual funds under the UFS' management.
The embezzled amount could even be higher, the report speculated.
The trustee, custodian and auditor all neglected their fiduciary responsibilities as they, since 2018, kept overlooking the false reporting of the bank balance, which in reality was taken out by the asset manager, the media report said.
Rezaul Karim, spokesperson of the BSEC, was yet to learn about the development at the HC.
He said the commission was still investigating the matter and it had written to the Bangladesh Financial Intelligence Unit (BFIU) to freeze banking transactions by the asset manager and its directors.
Alamgir left the country for Dubai in October and he is in Singapore now.
The capital market in Bangladesh has long been exposed to behavioural vulnerability due to its retail-dominated market structure and the reported breach of trust and fraud by a professional asset manager would drastically hurt reforms for a more robust institutional investment base here, said market professionals and experts.
According to sources, the BSEC is looking for more such fraudulence in the investment industry.