FE Report (January 26, 2011)
The government has formed a high-powered probe committee to identify individuals and institutional investors involved in recent share market scam.
Prime Minister Sheikh Hasina on Tuesday approved the terms of reference (ToR) for the committee, a senior official in the Prime Minister's Office (PMO) said.
Khondkar Ibrahim Khalid, Chairman, Bangladesh Krishi Bank and former deputy Governor of Bangladesh Bank (BB), has been made head of the committee. Other members of the probe committee will be selected today (Wednesday).
"A probe committee on recent share market irregularities, headed by Ibrahim Khalid, has been formed," Muhith told reporters after a meeting of the Executive Committee of the National Economic Council (ECNEC).
"We selected two other members of the committee, but dropped them later from it after their involvement in share business had been known," Muhith added.
He said names of two members of the committee will be finalised today (Wednesday).
The committee will submit its report to the government after three months from the date of formation of the probe panel.
According to the ToR, the committee will identify individuals and institutions and their techniques of manipulation in influencing the recent unusual ups and downs in the capital market. The amount of money invested by such vested groups in the share market for short term profit, instead of investing for long term, will also be unveiled by the committee, the ToR added.
The high-powered committee will also identify individuals, banks, financial institutions, brokerage houses and listed companies, responsible for the recent volatility in the capital market.
The ever highest general index of Dhaka Stock Exchange (DSE) was 8918.51 on December 5, 2010. The general index shed above 2000 points from January 3, 2011 to January, 20 triggering vandalism by investors in the streets.
Finance Minister on Sunday last announced to form a probe committee to investigate the irregularities in the share market.
According to the ToR, the committee will review how the small investors were affected after they had invested their money in the initial public offerings (IPOs), while it will analyse the liquidity of the market during the steep fall of share prices.
The committee will also identify institutions and individuals, who diverted huge amount of money from the market by issuing initial public offerings under the cover of direct listing, book building and fixed prices. In the process, the roles of issue managers, regulatory authorities, audit firms and asset valuer companies should also be examined by the committee, the ToR stated.
The committee members will compare the rate of return between the profits arising from the investment of savings instruments and banks and profits from long term investment in the capital market. The base time for the analysis has been set at early 2010 to draw the comparison, the ToR said.
The committee will analyse the trend of continuous rise of index in share market, recommend a sustainable scenario for the market and give a picture of an over heated capital market, said the ToR of the committee.
The probe committee will examine whether the role of regulatory authority of capital market -- Securities and Exchange Commission (SEC), was appropriate in handling the recent volatility and unusual ups and downs of the market. The committee members will also suggest whether the existing laws and regulations to regulate the market are adequate.
According to the ToR, the committee members will review the expertise of SEC in handling the unusual volatility in the capital market and put their recommendations on whether the governance and overall infrastructure of Dhaka Stock Exchange and Chittagong Stock Exchange are up to the mark to cope with the entire situation of the market.
"The government is serious to detect the irregularities in the capital market and identifying culprits in the process of manipulating the recent share market," a high official in the SEC said.
"None should go unpunished," he added
Prime Minister Sheikh Hasina on Tuesday approved the terms of reference (ToR) for the committee, a senior official in the Prime Minister's Office (PMO) said.
Khondkar Ibrahim Khalid, Chairman, Bangladesh Krishi Bank and former deputy Governor of Bangladesh Bank (BB), has been made head of the committee. Other members of the probe committee will be selected today (Wednesday).
"A probe committee on recent share market irregularities, headed by Ibrahim Khalid, has been formed," Muhith told reporters after a meeting of the Executive Committee of the National Economic Council (ECNEC).
"We selected two other members of the committee, but dropped them later from it after their involvement in share business had been known," Muhith added.
He said names of two members of the committee will be finalised today (Wednesday).
The committee will submit its report to the government after three months from the date of formation of the probe panel.
According to the ToR, the committee will identify individuals and institutions and their techniques of manipulation in influencing the recent unusual ups and downs in the capital market. The amount of money invested by such vested groups in the share market for short term profit, instead of investing for long term, will also be unveiled by the committee, the ToR added.
The high-powered committee will also identify individuals, banks, financial institutions, brokerage houses and listed companies, responsible for the recent volatility in the capital market.
The ever highest general index of Dhaka Stock Exchange (DSE) was 8918.51 on December 5, 2010. The general index shed above 2000 points from January 3, 2011 to January, 20 triggering vandalism by investors in the streets.
Finance Minister on Sunday last announced to form a probe committee to investigate the irregularities in the share market.
According to the ToR, the committee will review how the small investors were affected after they had invested their money in the initial public offerings (IPOs), while it will analyse the liquidity of the market during the steep fall of share prices.
The committee will also identify institutions and individuals, who diverted huge amount of money from the market by issuing initial public offerings under the cover of direct listing, book building and fixed prices. In the process, the roles of issue managers, regulatory authorities, audit firms and asset valuer companies should also be examined by the committee, the ToR stated.
The committee members will compare the rate of return between the profits arising from the investment of savings instruments and banks and profits from long term investment in the capital market. The base time for the analysis has been set at early 2010 to draw the comparison, the ToR said.
The committee will analyse the trend of continuous rise of index in share market, recommend a sustainable scenario for the market and give a picture of an over heated capital market, said the ToR of the committee.
The probe committee will examine whether the role of regulatory authority of capital market -- Securities and Exchange Commission (SEC), was appropriate in handling the recent volatility and unusual ups and downs of the market. The committee members will also suggest whether the existing laws and regulations to regulate the market are adequate.
According to the ToR, the committee members will review the expertise of SEC in handling the unusual volatility in the capital market and put their recommendations on whether the governance and overall infrastructure of Dhaka Stock Exchange and Chittagong Stock Exchange are up to the mark to cope with the entire situation of the market.
"The government is serious to detect the irregularities in the capital market and identifying culprits in the process of manipulating the recent share market," a high official in the SEC said.
"None should go unpunished," he added
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