Trendset investors to get back some debt further
Earlier, 40 investors claimed Tk25 crore against the brokerage house while the stock exchange paid them Tk9 crore selling the Trendset Securities membership
Key Financials:
- The brokerage house appropriated Tk25 crore
- Management confessed to CSE hearing
- CSE paid Tk9 crore selling Trendset membership
- Investors to get 13 lakh shares as debt ratio
- 20% debt to remain unpaid
The investors of Trendset Securities Ltd, a member of Chittagong Stock Exchange, will get back a further portion of their debt in the form of shares of some listed firms.
Earlier, 40 investors claimed Tk25 crore against the brokerage house while the stock exchange paid them Tk9 crore selling the Trendset Securities membership.
The deception of the brokerage firm with the investors came to the fore in FY2011-12.
Trendset embezzled Tk25 crore which the investors deposited to the brokerage house for investment in the capital market in Fiscal Year 2007-2009.
The regulator formed a two-member investigation team to probe the issue at that time.
Recently, the Bangladesh Securities and Exchange Commission (BSEC) issued a directive to the Chittagong Stock Exchange (CSE) in this regard.
According to Bangladesh Securities and Exchange Commission (BSEC), Trendset Managing Director Khandakar Rashed Ahmed kept the investors' funds to different consolidated customers' accounts.
After that Rashed withdrew the funds illegally using the banking channel and bought 4.5 lakh placement shares of Shahjibazar Power Company Ltd.
Now the number of the shares stood at more than 13 lakh, the distribution of which will make it possible for the stock exchange to meet 54% claim of the investors as per their ratio.
CSE will calculate the price of the shares as per their value on November 4.
The regulator directed the CSE to submit those shares to the investors' Beneficiary Owners (BO) accounts as per the ratio of their claim.
On the other hand, Chittagong Stock Exchange sources said the nearly five lakh shares that Mr Rashed Ahmed bought remain stuck in Shahjibazar Power Company while another eight lakh more shares were transferred to BLI Securities.
CSE has already issued letters to BLI Securities and Shahjibazar Power Company to transfer shares to their depository participants, but the two are yet to comply with the CSE directive, said sources.
The stock exchange will transfer those shares to the BO accounts of the investors as per their ratio claim.
CSE sources said the brokerage firm used to provide money receipts to the investors, but it did not submit money to the consolidated customers' accounts.
Trendset management confessed to the CSE during a hearing and sought time to resolve it, but to no avail.
In 2018-19, the stock exchange sold the Trendset membership to BRB Securities and paid Tk9 crore of its investors out of the total claim of Tk25 crore.
Sources said 20% debt will remain unpaid for the investors.
The reporter tried to talk to Trendset managing director but failed to catch up with him.
According to the stock exchange rules 1987, every stock broker must maintain a consolidated customers' account in its name with a scheduled bank for depositing money received from its customers and paying the money to them as well. Besides, all money received from customers shall be deposited to that account on the day of receipt.
But some brokerage firms did not comply with the rule properly and took advantage of the lax monitoring of the authorities concerned.