UFSL, trustee, custodian, auditors to face the music
The Bangladesh Securities and Exchange Commission (BSEC) has decided to sue Universal Financial Solutions Ltd (UFSL) Managing Director Syed Hamza Alamgir and other relevant people and firms under anti-money laundering law for embezzling Tk235 crore of investors' wealth under their management.
The regulator said on Thursday that it will send a notice to the asset management company, seeking an explanation for why the firm's registration and business licence shouldn't be cancelled.
The Investment Corporation of Bangladesh (ICB), as the trustee of the funds, will be forced to act to recover the gigantic embezzled sum following special audits as it was responsible to protect investors' wealth.
The BSEC itself will also serve a show cause notice regarding why the then officials of the ICB's trustee and custodian services wings will not be punished.
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The BSEC move came two days after The Business Standard had published a report titled "A fox to guard the henhouse", describing how the UFSL managing director pocketed Tk235 crore of investors' money from four mutual funds using a number of tricks before fleeing the country in October last year.
The custodian is the protector of the securities a mutual fund holds, while the trustee is responsible for the entire affairs related to investors' interest protection.
Also, the two audit firms – Ahmed Zaker and Company, and Rahman Mostafa Alam and Company – and each of their partners will be barred from working for any listed firm or capital market intermediary until the Financial Reporting Council goes through the BSEC investigation paper and the issues are resolved.
The UFSL, in the last couple of years, has embezzled cash from the four mutual funds under its management through syphoning cash, and showing fake assets in financial statements.
Surprisingly, no one – trustee, custodian, or auditor – stopped the crime, and Syed Hamza Alamgir fled the country last year.
Even the BSEC did not take timely action to stop his departure from the country even if it had primary findings of the scam based on which it launched its investigation.
