BSEC’s IPO process under scrutiny by ACC

Staff Reporter :

The Anti-Corruption Commission (ACC) conducted an operation at the Bangladesh Securities and Exchange Commission (BSEC) on Sunday (2 March) following allegations of corruption and irregularities within the stock market regulatory body.

According to an ACC statement, the enforcement team examined documents related to Initial Public Offering (IPO) approvals, including application lists, prospectuses, audit reports, and final approval records submitted by companies.

Simultaneously, another ACC team gathered information and documents concerning Beximco Sukuk and IFIC Amar Bond, both linked to Salman F Rahman, according to an ACC source.

The preliminary review revealed that IPO approvals were granted based on fabricated earnings reports, inflated asset statements, and manipulated balance sheets. The ACC noted that, in many cases, recommendations and observations from the Dhaka Stock Exchange (DSE) were ignored, enabling widespread financial misconduct.

The ACC team also found that BSEC failed to act against several fraudulent practices, including private placement fraud, inflated share prices upon market entry, rapid share sales leading to subsequent price crashes.

Additionally, several financially weak companies were allegedly approved for IPOs illegally and later downgraded to the Z-category shortly after entering the stock market.

According to the ACC, their initial findings indicate that IPO approvals were based on manipulated balance sheets, falsified earnings reports prepared by chartered accountants, overvalued company profiles created by issue managers. These irregularities were reportedly overlooked during the approval process.

The ACC has stated that the team will continue reviewing relevant records and will submit a comprehensive report detailing the irregularities and misconduct uncovered during the investigation.