LR Global Bangladesh Asset Management Company's repeated attempt to remain as the asset manager of two closed-end mutual funds was rejected again in the apex court today.
Hearing separate appeals of the securities regulator and some investors of the two funds, the full bench of Appellate Division led by Chief Justice Syed Mahmud Hossain passed an order to cancel the High Court's stay order, said Barrister Mustafizur Rahman, a lawyer representing the investors.
As LR Global obtained a stay order from the High Court in the middle of last month, the securities regulator and trustee of the two funds had to stop the process of removing it from managing DBH First Mutual Fund and Green Delta Mutual Fund.
Following a controversial investment from mutual funds in a private company that runs an online media portal, around 70 percent unitholders of both the funds in last year instructed the trustee –Bangladesh General Insurance Company Ltd (BGIC) – to remove LR Global and appoint IDLC Asset Management instead.
Green Delta Insurance and Delta Brac Housing Corporation Ltd – respective sponsors of the two listed mutual funds – also wanted to replace the asset manager.
However, the asset manager had filed a series of pleas to continue its job but lost the legal battle in the Appellate Division in December 2019.
Later, it filed an appeal to the Bangladesh Securities and Exchange Commission (BSEC), which was also rejected.
The BGIC had begun the process of executing the BSEC order to replace the two funds' asset manager. Still, it had to stop again as LR Global submitted a stay order from the High Court in mid-February, which the apex court cancelled today.
"After receiving the certified copy of the Appellate Division order, we will communicate with the BSEC and act accordingly to appoint the new asset manager," said Ahmed Saifuddin Chowdhury, managing director of the BGIC.