The Bangladesh Securities and Exchange Commission (BSEC) has barred former chief regulatory officer (CRO) of the Dhaka Stock Exchange (DSE), Md Khairul Bashar Abu TaherMohammed, from holding any official position in listed companies or other institutions operating under the country’s capital market regulatory framework.
In an order issued today (30 July), the securities regulator said the ban takes immediate effect under Section 20 of the Securities and Exchange Ordinance, 1969.
According to the order, all stock exchanges, market intermediaries, listed companies and other entities regulated by the BSEC have been instructed not to appoint Khairul Bashar to any official position related to the capital market.
The commission said that on 14 May 2024, Khairul Bashar, then serving as the DSE’s Chief Regulatory Officer, was assigned to inspect seven TREC holders, including Mashihor Securities Ltd, and submit an inspection report within 30 working days.
However, he failed to complete the inspections and submit the report within the stipulated timeframe, an act the BSEC described as gross negligence and a violation of the Securities and Exchange Ordinance, 1969, as well as relevant regulations.
The regulator said the decision was taken to protect investors’ interests and strengthen market governance.
Market officials said one of the key responsibilities of a stock exchange’s Chief Regulatory Officer is to conduct regular inspections of brokerage firms, detect regulatory violations and submit inspection reports to the BSEC on time. These reports form the basis for the commission’s enforcement actions, investigations and regulatory interventions.
Failure to submit such reports within the prescribed timeframe can significantly undermine the market surveillance process, officials added.
Khairul Bashar’s alleged negligence first drew widespread attention following the high-profile Mashihor Securities scandal, in which the brokerage firm was accused of misappropriating approximately Tk161 crore belonging to investors. The incident is regarded as one of the largest brokerage frauds in Bangladesh’s capital market history.
According to the BSEC’s findings, despite being responsible for regulatory oversight, Khairul Bashar failed to ensure timely on-site inspections and effective supervision of MashihorSecurities.
The commission believes that had the inspections and investigations been conducted on schedule, the irregularities could have been detected much earlier, potentially preventing substantial financial losses suffered by investors.
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