Salman, Shayan, Shibli banned from capital market for life

The Bangladesh Securities and Exchange Commission (BSEC) has fined Salman F Rahman, who advised ousted prime minister Sheikh Hasina on industry and investment and is vice chairman of Beximco Group, Tk 1 billion and declared him a “persona non grata”, or unwanted, in the capital market for life after evidence emerged that he committed fraud in promoting IFIC "Amar Bonds".

His son Shayan Fazlur Rahman was fined Tk 500 million and was also declared “persona non grata” on the same charge.

Salman was the chairman of IFIC Bank and his son Shayan was the vice chairman at the time the bond was issued.

The BSEC chairman at the time was Shibli Rubayat-ul-Islam. The current commission has also permanently banned him in the stock market.

The commission disclosed these decision in a press release issued on Wednesday.

These decisions were taken at the 965th meeting of the commission on Tuesday, based on the report of the Stock Market Inquiry and Investigation Committee. The meeting was presided over by BSEC Chairman Khondoker Rashed Maqsood.

Former CEO of IFIC Investments Limited, Imran Ahmed, was banned from all forms of capital market activities for five years, while legal action has been initiated against the then Managing Director of IFIC Bank, Shah Alam Sarwar.

IFIC Bank PLC, as an institution, was also served with a formal warning over its involvement in the matter.

Additionally, the commission decided to warn several former nominated and independent directors of IFIC Bank, including ARM Nazmus Saquib, Md Golam Mostafa, Md Zafar Iqbal (ndc), Kamrun Nahar Ahmed, and Sudhanshu Shekhar Biswas.

According to the statement, the actions were based on findings submitted by a capital market inquiry and investigation committee, which looked into the issuance of the Tk1,500 crore “IFIC Guaranteed Sreepur Township Green Zero Coupon Bond” by Sreepur Township Ltd—a private limited company established in March 2023.

The investigation raised red flags about the disbursement of Tk248 crore within just four days of capital raising, allegedly for land acquisition and development purposes, a move the commission found questionable.

Although the name is “IFIC Amar Bond”, the bond is not from IFIC Bank. This bank is just the guarantor of that bond. However, the campaign to withdraw Tk 10 billion was carried out in such a way that it would appear that the bank had issued the bond.

Salman and his son Shayan are partners in the real estate company and are also stakeholders in IFIC Bank. As a result, there was also talk of a conflict of interest in issuing “IFIC Amar Bond”.

Although Sreepur Township Limited, established in March 2023, had no experience in building any flats or plots, IFIC Bank became the guarantor of their bond. In other words, Sreepur Township was given a guarantee allowing it to withdraw money while using the reputation of IFIC Bank.

Although the name of IFIC was written in large letters in the advertisements given in the newspapers, the name of Sreepur Township was written in small letters.

The BSEC says, “In this way, investors were attracted to invest through deceit. An inquiry and investigation have been conducted by the Stock Market Inquiry and Investigation Committee on the matter, and its report has been submitted to the commission.”

Further investigations are being carried out regarding irregularities involving the Beximco Secured Convertible or Redeemable Asset-Backed Green Sukuk.

The commission said it would take necessary action against all individuals and entities involved in regulatory breaches linked to the Sukuk issuance.

In the statement, BSEC reiterated its commitment to transparency and good governance in the capital market, affirming that it would continue taking strict measures against such irregularities.