Systemic failure blamed for Bangladesh share market crisisApril 7th, 2011 - 8:43 pm ICT by IANS
Dhaka, April 7 (IANS) A probe committee said Thursday that systemic failure has allowed massive manipulation of the stock exchanges in Bangladesh, and also dismissed the view that political involvement led to the repeated market crashes in December-January.
It recommended a major overhaul of the Securities and Exchange Commission (SEC), including replacement of its current chairman.
The “bad decisions” of the regulator were responsible for the market volatility that led to investors taking to the streets and engaging in violence on several occasions, the committee noted.
“All the institutions that have anything to do with the stock market were responsible for the debacle,” Khondkar Ibrahim Khaled, who headed the probe committee, told reporters about their findings at Bangladesh Krishi Bank here.
Khaled, a professional banker, submitted the committee’s report to Finance Minister A.M.A. Muhith Thursday, the Star Online reported.
The report cited 15 case studies that showed how the market was heavily manipulated through rigging of shares by individuals and cartels.
Apart from the SEC, the committee named Dhaka Stock Exchange, Investment Corporation of Bangladesh (ICB), stock market issue managers, issuers, valuers and auditors as those who had colluded in turning the market volatile.
The repeated market crashes have been the subject of political accusations between Prime Minister Sheikh Hasina and opposition leader Khaleda Zia.
In one example, the report mentioned how two investors opened several accounts and transacted 25 percent of their total trade between themselves, impacting share prices on the market.
On money losses, Khaled said he estimated around 40 to 50 billion takas ($570-710 million) went to private pockets through direct listing.
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