2024-09-25 06:00:35
After the fall of Sheikh Hasina’s government in the anti-discrimination student movement, reforming the banking sector and restoring confidence in the capital market were the main challenges of the economy. A little hope has appeared in the country’s financial market under the leadership of the interim government in a month and a half. But, the image of the capital market is still in the previous position.
Experienced economist as the governor of the interim government to reform the banking sector. Ahsan H. Mansoor has been given the responsibility of Bangladesh Bank. Former banker Khandkar Rashed Maksud has been given the responsibility of capital market to restore the confidence of investors. The stakeholders feel that the banking sector has got an experienced guardian, but the capital market has not got a qualified policy maker.
Sources say BSEC has been restructured to restore investor confidence. But, several wrong decisions of BSEC’s new commission have already sparked controversy. Even, questions are being raised about the competence and discretion of those appointed to the commission. As a result, instead of restoring confidence in the capital market, there is an infighting between BSEC and market intermediaries.
They also say that the current commission may think everyone is corrupt or bad. What they are doing as parents is right; It would be a very wrong decision to think that there is no need to listen or take advice from others. Investors will turn away from the capital market if they cannot get out of such thinking.
After observing the activities of BSEC for the last one and a half months, it has been seen that the commission has not yet been able to activate the Dhaka and Chittagong Stock Exchanges by appointing the chairman and independent directors. BSEC has made three wrong decisions to appoint independent directors of stock exchanges. Market intermediaries, including stock exchanges, have undervalued the offering, leading to infighting. The question arises because the policy makers of the commission do not have the mindset to coordinate with the advice of capital market stakeholders (brokerage houses, merchant banks, asset managers, investors and experts). In addition, questions have been raised about the prudence of BSEC’s policy makers in the press conference in which they answered the questions of the journalists and put the blame on the shoulders of the ministry.
After the formation of the interim government, former Managing Director (MD) of Standard Bank, Khandkar Rashed Maqsood, was appointed as the Chairman of BSEC. At the same time, BSEC was revamped by re-appointing two new commissioners including qualified and experienced commissioners ATM Tarikuzzaman and Mohammad Mohsin Chowdhury of the previous commission. Among these five members, only ATM Tarikuzzaman had 25 years of direct working experience with the capital market. However, on September 11, the Financial Institutions Department of the Ministry of Finance removed ATM Tarikuzzaman from his post with three months or until December 10. BSEC chairman Rashed Maqsood issued an order removing him from office on September 15, four days after the government issued that order. Later, ATM Tarikuzzaman was forced to resign on September 17 under pressure. Such decision of BSEC has been questioned.
Meanwhile, BSEC appointed seven independent directors to DSE on September 1. Among them, DSE’s former managing director (MD) Majedur Rahman, Dhaka University teacher Dr. Md. Helaluddin and additional secretary of the financial institution department of the Ministry of Finance. Those concerned have raised questions that there has been a breach of law in the appointment of Nahid Hossain. In view of this, Majedur and Helaluddin expressed their inability to perform the duties of independent director of DSE. Later, AF Neseruddin, partner of audit firm Huda Bhasi Chowdhury and Syeda Zakerin Bakht Nasir, chief consultant of ZN Consultants, were appointed in their place in the second phase. But, as the audit firm Huda Bhasi Chowdhury is the auditor and ZN Consultant is the consultant firm of DSE, they also expressed their disqualification due to conflict of interest as per law. In the third phase, former MD of financial institution IPDC Mominul Islam and former country manager of multinational Wells Fargo Bank Shahnaz Sultana were appointed. The third point also raises the question that as per sub-section ‘K’ of Section 5 of the Demutualization Act, 2013, if a person acts as a director and officer of a listed company, the concerned person cannot be an independent director of the stock exchange. But, Mominul Islam was MD of listed company IPDC even a year ago. Stakeholders feel that repeated wrong decisions in appointing independent directors indicate the inefficiency of the regulatory body.
Besides, a month and a half after the new commission took over, it has yet to convene any meeting with the market intermediaries to mobilize the depressed capital market. At the same time, infighting has become more pronounced as market intermediaries, including stock exchanges, have devalued their offerings.
BSEC Chairman Khandkar Rashed Maqsood put the blame on the Ministry of Finance when asked about Tarikuzzaman’s resignation at the press conference organized after the meeting with World Bank representatives last Sunday (September 22). He said, some work has to be done in coordination with the ministry. Nothing to say publicly about this.
Khandkar Rashid Maqsood left without answering questions about repeated mistakes in the appointment of independent directors of DSE and conflicts with market intermediaries.
In this regard, Al Amin, a capital market expert and Associate Professor of Accounting and Information Systems Department of Dhaka University, told RisingBD, “We do not see the steps that need to be taken to bring dynamism to the capital market, which is in a long recession. I see every day, the investigation committee is being held. It seems that the new commission has been tasked only to investigate. It is important to pay attention to whether the confidence of investors in the capital market is returning or not. Now some decisions are being taken from the commission, which is making the situation more volatile. I think, they should decide more wisely.
Bangladesh Capital Market Investors Union General Secretary Kazi Abdur Razzak told RisingBD that there is a lack of rhythm in the decisions of BSEC recently. Decisions are not capital market friendly. This is creating distance and infighting among stakeholders related to BSEC. It is very important to end this. Khandkar Rashed Maqsood was seen struggling to answer the questions of journalists at the press conference organized by BSEC last Sunday. Therefore, decisions taken in consultation with all concerned stakeholders will increase dynamics in the capital market and restore investors’ confidence.
The chief executive officer of a top merchant bank, who did not want to be named, said, “After the formation of the interim government, the way we wanted to reform the BSEC has not happened at all.” There was a need to appoint experienced and qualified policy makers in capital markets to BSEC. Now those who are in policy-making positions in the Commission, think they are so wise that they don’t feel the need to talk to us or ask for our opinion. In this again, who was a talented and competent commissioner, he was expelled by conspiracy. So, I can’t expect anything good from this commission.