The provision shortfall of eight closed-end mutual funds of ICB Asset Management Company stands at Tk185 crore.
The financial statements of these mutual funds for the accounting year ending on June 30 this year, have revealed the information. MM Rahman & Co was the auditor firm.
ICB Asset Management Company is a subsidiary of the state-run Investment Corporation of Bangladesh.
Among the eight funds, the ICB AMCL First Agrani Bank Mutual Fund has a shortfall of Tk13 crore, ICB AMCL Sonali Bank Limited 1st Mutual Fund Tk18 crore, IFIL Islamic Mutual Fund-1 Tk35 crore, ICB AMCL Third NRB Mutual Fund Tk34 crore, and Phoenix Finance First Mutual Fund Tk19 crore.
Besides, the Prime Bank 1st ICB AMCL Mutual Fund has a shortfall of Tk27 crore, ICB Employees Provident Mutual Fund One: Scheme One Tk26 crore, and ICB AMCL Second Mutual Fund Tk14 crore.
According to the audit information, the total investment of these eight stock-market listed mutual funds was at Tk796 crore. However, as of June 30, 2019, the value of their investment as per the current market price stood at Tk563 crore. The unrealised loss of these funds is Tk233 crore.
As per the mutual fund law, the authorities of any mutual fund have to keep cent percent provision against the unrealised loss. But the authorities of these eight mutual funds, as per the audit report, have kept provisions with only Tk60 crore, and they have collected those amount from the reserves of the funds.
Golam Rabbani, acting chief executive officer at the ICB Asset Management Company, told The Business Standard: "Due to the sharp fluctuations of indices at the country's two bourses, the unrealised losses of these mutual funds have increased.
"If we keep provisions against the unrealised losses as per law, the unit-holders of these funds will get no dividends. We, however, have sought time from the ICB to meet the provision shortfall," he added.
The ICB AMCL First Agrani Bank Mutual Fund in the last financial year, provided its unit-holders with a five percent cash dividend. During this period, the fund had an earning per unit (EPU) at Tk0.50.
The ICB AMCL Sonali Bank Limited 1st Mutual Fund provided a six percent cash dividend to its unit holders with an EPU of Tk0.57.
The IFIL Islamic Mutual Fund-1 provided six percent cash dividend to its unit-holders, while the ICB AMCL Third NRB Mutual Fund provided four percent dividend with cash.
Besides, the Phoenix Finance First Mutual Fund offered five percent dividend to its unit-holders, Prime Bank 1st ICB AMCL Mutual Fund six percent, ICB Employees Provident Mutual Fund One: Scheme One 4.5 percent, and ICB AMCL Second Mutual
Fund provided six percent. These dividends were also offered in cash.