Staff Reporter :
Although the Investment Corporation of Bangladesh (ICB) is a state-owned entity responsible for protecting public investments, it has increasingly been linked to recurring irregularities in the capital market.
Recent reviews of financial statements have exposed serious violations by ICB’s publicly funded Trustee Division, which is accused of failing to protect investors’ interests and worsening the crisis in the mutual fund sector.
ICB-managed mutual funds, once considered profitable and relatively secure, are now facing growing losses.
This troubling development has sparked serious concerns over accountability within the organisation, particularly regarding how those responsible for repeated violations continue to remain in their positions.
Amid mounting criticism and regulatory concern, the Bangladesh Securities and Exchange Commission (BSEC) has launched an investigation into ICB to probe the alleged capital market irregularities.
One of the most significant violations involves the improper investment of funds from one scheme into another scheme managed by the same asset management company.
Audit findings for FY 2024–25 has shown that the ICB AMCL Unit Fund
invested in several other ICB-managed schemes, in clear violation of Clause 3.2(a) of the Trust Deed, which explicitly prohibits mutual funds from investing in or lending to other schemes under the same asset manager.
The continuation of such practices over an extended period, despite clear legal restrictions, indicates that the Trustee Division either failed to raise objections in a timely manner or deliberately ignored the violations.
This lack of effective oversight constitutes gross negligence and a direct breach of the Securities and Exchange Commission (Mutual Fund) Rules, 2001. Consequently, BSEC’s Investment Management Division has decided to initiate enforcement proceedings against ICB.
Irregularities have also been identified in dividend distribution. As per a BSEC directive issued on 14 January 2021, cash dividends must be maintained in a separate bank account.
However, audits revealed a shortfall of Tk 13.86 million in the dividend distribution account of the ICB AMCL Islamic Unit Fund and a deficit of Tk 7.18 million in the ICB AMCL Converted First Unit Fund. ICB reportedly failed to provide any acceptable explanation for these discrepancies, exposing investors to heightened financial risk.
Despite repeated dividend shortfalls across several funds, the Trustee Division remained largely silent, failing to verify records, issue warnings, or alert the regulator.
This inaction reflects a blatant disregard for the financial interests of unitholders and undermines the very purpose of trustee oversight.
Capital market experts argue that had the trustee performed its independent supervisory role properly, these irregularities could have been detected and prevented at an early stage.
Instead, the trustee’s inaction effectively condoned mismanagement and raised serious concerns about governance in publicly funded mutual funds.
This is not the first time ICB has faced allegations of corruption and irregularities. On December 30, 2023, the Anti-Corruption Commission filed a case against more than two dozen individuals, including ICB Managing Director Md Mosaddekul Alam, Assistant General Manager Md Taleb Hossain, Deputy General Manager Md Shahjahan, and former Assistant General Manager Md Mahbub Alam, accusing them of embezzling Tk 3.11 billion through fraudulent loans and misappropriation of savings deposits.
Despite repeated investigations in the past, critics allege that many cases were previously suppressed under political or administrative patronage, allowing malpractice within ICB to continue unchecked.
