Dhaka, Bangladesh – May 4, 2024
The High Court has upheld penalties imposed by the Bangladesh Securities and Exchange Commission (BSEC) on Mohammad Hamdul Islam, the former managing director of Banco Finance and Investment Limited.
The court dismissed a writ petition filed by Hamdul Islam challenging a BSEC decision from November 2022. The BSEC found Hamdul Islam violated Public Issue Rules by holding pre-IPO shares of companies where Banco Finance served as the issue manager, in the names of his wife and relatives. As punishment, the BSEC imposed a Tk 10 crore fine and Five-year ban from participating in the capital market
The High Court, however, removed the Tk 16 crore penalty imposed on five of Hamdul Islam’s family members. The court found insufficient evidence of their involvement.
Barrister Sayed Mahsib Hossain, representing the BSEC, stated that the court found Hamdul Islam guilty of using his position to benefit his relatives, violating securities regulations. Hamdul Islam said he is considering an appeal after consulting with his lawyer.
BSEC investigations revealed Hamdul Islam held pre-IPO shares through his family members and failed to cooperate with a BSEC inquiry. This case echoes a 2014 incident where a CEO received a similar penalty for manipulating share prices.
This verdict reinforces the BSEC’s role in regulating the capital market and discourages similar violations by market participants.