Committee formed to probe embezzlement by Moharam Securities
The Bangladesh Securities and Exchange Commission (BSEC) has formed a probe committee to look into the clients' asset embezzlement cases at Moharam Securities — a member firm of the Chittagong Stock Exchange (CSE) — confirmed Rezaul Karim, BSEC executive director and spokesperson.
The committee consisting of BSEC Additional Director Md Iqbal Hossain, Deputy Director Md Abdus Salim, Assistant Director Md Tauhidul Islam Saddam, and a CSE Assistant Manager Md Bashar, would submit its findings within 60 days.
Moharam Securities is one of the four CSE brokers that have been in suspension due to an identified total of around Tk50 crore loophole in their accounts. The other three were Sylhet Metro City, Trendset Securities, and Firstlead Securities.
Such loopholes in brokerage firms are created when a broker misuses clients' idle cash at beneficiary owner accounts or secretly sells off customer's securities and embezzles the money.
The CSE is trying to pay clients' dues by selling the licences and assets of these brokerage companies.
A CSE official recently told TBS that 30% of the clients' dues was paid by selling the licence of Trendset Securities. Firstlead Securities and Moharam Securities were in the pipeline.
However, Sylhet Metro City's licences and assets could not be sold due to a writ filed by the owners.
Another CSE broker – Sylnet Securities – has been in trading suspension since 2022 due to a similar financial loophole and client complaints. The port-city bourse, in a newspaper advertisement, asked the firms' clients to submit their claims in 15 days.
Meanwhile, three brokerage firms — Banco Securities, Crest Securities, and Tamha Securities — of the Dhaka Stock Exchange (DSE) were suspended for embezzling a total of around Tk177 crore from more than 10,900 of their clients.
The DSE suspended the trading operation of Tamha Securities on allegations of embezzling around Tk52.79 crore of investors' money, Crest Securities for Tk36.52 crore and Banco Securities for Tk87.56 crore.
According to the DSE, in the last two years, three suspended brokerage houses paid only 8.46% of the total cash claimed by the duped general investors.
According to a senior officer of the DSE, the premier bourse sold some assets, and dividends were deposited with the DSE by three brokerages. From the fund, an average of 15% was paid to some investors on their claims. A few more payments are in process.
Deficits in several stockbrokers' consolidated customer accounts also remained a headache for the DSE.
According to the recent report of the BSEC, the six firms were running with a total of over Tk49 crore in deficits in their accounts.
PFI Securities have over Tk33 crore in consolidated customer account deficit, Modern Securities has over Tk5 crore, Fareast Stocks and Bonds over Tk1.2 crore, Asia Securities Tk62 lakh and Latif Securities Tk32 lakh.