The Board of Directors of the Dhaka Stock Exchange (DSE) on Thursday selected Kazi Sanaul Hoq as their new managing director though there remains a difference in opinions.
The selection is awaiting the approval of the Bangladesh Securities and Exchange Commission (BSEC).
DSE sources told The Business Standard the Nomination and Remuneration Committee (NRC) of the exchange on Tuesday sent two names to the board among four applicants interviewed.
The two were Kazi Sanaul Hoq, former managing director of the Investment Corporation of Bangladesh (ICB), and immediate past Managing Director of Jamuna Bank Shafiqul Alam.
The board was divided during the selection, according to sources. Three of the four shareholder directors of the premier bourse opined against Sanaul. One of the independent directors also took the same stance.
Arguments supporting the minority directors' dissent were noted and sent to the BSEC, said DSE officials.
However, as the independent directors are the majority in DSE Board, Sanaul Hoq's name has finally been recommended for regulatory approval.
A director of the premier bourse complained the DSE has a norm that managing director candidates will appear before the board for an interview. But this time the NRC did not follow the process, which indicates the NRC was predetermined to select a specific candidate.
He also complained that Sanaul Hoq is a controversial candidate as he had failed to help revive the stock market during his tenure in the ICB as managing director.
Kazi Sanaul Hoq, however, told The Business Standard, "The ongoing downturn of the stock market is a wider problem. The ICB alone is too insufficient to stop it."
He also defended his role in the bull market of 2009-10 as the chief executive officer (CEO) of the brokerage arm of ICB.
In the past, the Anti-Corruption Commission (ACC) had brought allegations against Sanaul and some of his team members for disbursing excessive margin loans to undeserving brokerage clients and personally benefitting from the process.
ACC officials also estimated the ICB had suffered from the financial loss of over Tk100 crore for Sanaul's role as the CEO.
"Margin loan was not regulated as it is done now. You will find almost all the brokerage houses and merchant banks disbursing a higher than usual margin loan at the pre-crush market. It never means the brokerage CEO is dishonest," Sanaul defended himself.
"And, I never took any benefits from that [excessive margin loan disbursement to undeserving clients]. I was the CEO and there had been responsible officers at the brokerage house to determine the creditworthiness of margin account holders," he added.
Sanaul said as the ACC reinvestigation did not find either the officials or him guilty, the court cleared them of the allegations.
He also claimed that there may be some quarters in the capital market who are continuously working against him whenever he works "in a responsible position."
"Recently, I stood first in the selection test for the position of managing director at the Bangladesh Development Bank Ltd, but surprisingly I was not called finally," he expressed his frustration.
He claimed it might be a consequence of his non-collaboration with many powerful people to meet their undue demands over his long career in state-owned financial service entities.
Sanaul Hoq, an accounting major from the University of Dhaka, has served BDBL, Agrani, Rajshahi Krishi Unnayan Bank, the ICB and lastly Karmashangsthan Bank in top managerial positions.
When contacted, a BSEC official said, "We are yet to get any forwarding from the exchange. Let us go through the documents and check what there is."
KAM Mazedur Rahman, a veteran banker, had his last office at the DSE as its managing director in July last year. The board had reselected him to continue for another three-year term as he had played a big role in securing a strategic partnership with the consortium of Shenzhen and Shanghai stock exchange.
But the BSEC, however, did not consider him a suitable candidate going forward.
And, since then, Abdul Matin Patwary, the chief financial officer of the DSE, has been serving as the acting managing director of the exchange.