Tension escalates again at the Dhaka Stock Exchange (DSE) over the controversy regarding the appointment of its new managing director (MD) following the unexpected resignation of the current MD before completing even the first year of his tenure.
Sources said a powerful shareholder director, allegedly at the centre of all the recent controversies at the country's oldest bourse, is again responsible for the latest crisis.
He picked M Asheq Rahman, a young banker, as the new MD only because the applicant is a friend of his son and would remain obedient, while there were several candidates who were more qualified with relevant experiences.
The shareholder director forced the nomination and remuneration committee (NRC) to select Asheq as the MD among the 21 candidates who had submitted applications in response to the DSE advertisement in November.
The committee proved to be heavily influenced by the shareholder director during the appointment process of the existing MD, Kazi Sanaul Hoq, a year ago.
However, the NRC could not discard the second candidate, Dr Mohammad Anamul Haque Sarker, as he has been working as the executive director at the London Stock Exchange since 2013 and deserves preference for his academic and professional backgrounds.
Following the NRC's recommendation to interview two candidates, the DSE board of directors finalised Asheq as the new MD, while a majority did not like Anamul's elimination from the race.
Anamul had been the chief executive officer of the National Bank of Kuwait for five years until 2013 and prior to that, he served the Saudi Arabia-based Islamic Development Bank as its head of finance and administration from 2002 to 2007.
DSE members, existing and former directors and senior officials having knowledge of the ongoing developments said the chosen candidate is merely a chief compliance and anti-money laundering officer at the country office of a foreign bank. He neither has the necessary experience in the stock market arena nor has ever led a large organisation from the top.
He deserves a mid-level management post at the DSE, said a director of the bourse.
The director is one of the board members who have been forcefully asked to approve the unwanted appointment at Wednesday's board meeting. He is now looking for technical ways to deny the influence.
Meanwhile, DSE Director Xie Wenhai, who represents the Chinese strategic investor Shenzhen-Shanghai stock exchange consortium, opined that the two candidates seem to be not fit for the MD post. Rather, they are suitable for the exchange's chief regulatory officer post.
One has no capital market experience at all and the other gathered experience abroad, not in Bangladeshi capital market, the strategic partner of DSE observed and sought for a candidate having local capital market experience along with all other qualifications.
Xie suggested the DSE board to consider internal candidates and give some encouragement policies to them, according to internal documents seen by The Business Standard.
Desperate for an obedient MD
A year ago, when the same shareholder director forcefully secured the appointment of his favourite MD candidate Kazi Sanaul Hoq despite three other shareholder directors' opposition, the desperation for obedience was not clear to everyone within DSE.
Rather, people thought it was nepotism.
But when Sanaul had to resign within only eight months since joining, insiders informed that he was not obeying the most powerful director's every single order blindly. Rather, he preferred upholding his professionalism.
Ideal relationship between the board and management in the demutualised stock exchange does not entertain the question of such orders and obedience as everyone's duties are already defined.
When asked about the desperation for obedience, a senior DSE official said the shareholder director is a man of interference and tries to influence everything in the bourse since he was its president more than once before demutualisation.
A number of DSE officials at various levels are his recruits and he continuously tries to use them to pursue his plans for more influence, which helps him entertain some dirty quarters in the capital market for unfair mutual gains.
The stock exchange is an important entity to address or overlook various irregularities in primary and secondary markets. Control over its board and management is important to the dirty quarters who try to manipulate things.
For example, the DSE official said, the controversial shareholder director was the mastermind behind the recent controversy over the stealthy board meeting agenda to directly list Best Holdings Ltd, which was stopped by the securities regulator finally.
The controversial director also managed a seat in the board of the newly formed securities clearing company Central Counterparty Bangladesh Ltd and his appointment ignited another controversy.
Sanaul is set to leave office in the second week of the new year.