Matiur Rahman’s inventory scandal exposes market corruption

Matiur Rahman, a former senior official of the Nationwide Board of Income (NBR), has turn out to be the face of a scandal that reveals a lot deeper points inside Bangladesh’s monetary sector. His admission of receiving placement shares at a reduction has sparked outrage and raised vital questions concerning the integrity of the nation’s inventory market and regulatory frameworks.

Md Matiur Rahman confessed throughout an interview with NTV that he had acquired placement shares of Fortune Sneakers at Tk 8, beneath the face worth of Tk 10, earlier than the corporate went public in 2016. This observe contravenes rules that require firms to hunt particular approval from the Excessive Courtroom to promote shares beneath face worth. Matiur’s means to amass these shares below such favorable phrases signifies a broader sample of manipulation and favoritism inside the market.

Placement shares discuss with the sale of securities to a choose group of traders, which might be carried out publicly or privately. In idea, this mechanism permits firms to lift capital effectively. Nevertheless, in observe, it has been exploited by influential figures who leverage their energy to acquire shares at vital reductions and even at no cost. These practices undermine the market’s equity and erode public belief in monetary establishments.

Matiur Rahman’s case is way from distinctive. Analysts have lengthy alleged that firms in Bangladesh are sometimes pressured into offering shares to highly effective people at discounted charges to safe their enterprise operations and facilitate their listings. This coercive observe forces firms to compromise on transparency and ethics, additional entrenching corruption.

The Bangladesh Securities and Alternate Fee (BSEC) has beforehand recognized irregularities within the allocation of placement shares. In 2021, the BSEC revealed that many people had acquired shares of Ring Shine Textiles with out correct documentation of fee. This disclosure included the names of quite a few influential individuals, highlighting the widespread nature of the issue.

Furthermore, there have been instances the place firms issued shares at inflated costs earlier than abandoning plans to go public. These schemes have left common traders bearing the brunt of monetary losses whereas the perpetrators escaped accountability. The BSEC’s failure to handle these points adequately has perpetuated a tradition of impunity, enabling continued exploitation by these in energy.

Rise of Matiur Rahman

Matiur Rahman’s rise to prominence is marked by his strategic use of political connections and his leveraging of energy inside the NBR. Born to Alhaj Abdul Hakeem Hawladar, a revered college instructor, Rahman confirmed tutorial promise from a younger age. His household’s monetary state of affairs was modest till his profession within the civil service took off throughout the post-1991 BNP regime.

Matiur Rahman’s affiliation with BNP Finance Minister Saifur Rahman and his household performed an important function in his ascent. Initially serving within the commerce cadre of the eleventh BCS, Matiur later transitioned to the income cadre, due to his political connections. This transfer considerably boosted his household’s monetary standing. His father was nominated because the chairman of Kazi Char Union, solidifying the household’s affect of their local people.

The household’s wealth accumulation has been accompanied by quite a few allegations of corruption and abuse of energy. Matiur’s brother Qayyum Howladar, as an example, established a manufacturing unit and several other companies in Dhaka with Matiur’s help. Howladar household’s affect of their village, Muladi Upazila, can also be evident. They reportedly used their energy to assemble a dam, obstructing a tidal canal and inflicting irrigation difficulties for native farmers.

This dam, which elevated the aesthetic enchantment of their ancestral house, exemplifies the methods through which the household leveraged their affect to prioritize private acquire over group welfare. The villagers have confronted elevated prices in crop manufacturing as a result of irrigation points attributable to the canal obstruction, highlighting the broader social affect of the household’s actions.

Regardless of Matiur Rahman’s public admission of wrongdoing on June 19, the BSEC has but to take substantial motion in opposition to him or the implicated firms. Whereas Matiur was faraway from his NBR place and reassigned to the finance ministry, this administrative shift fails to handle the deeper points at play. There was no complete investigation into Matiur’s actions or the extent of his manipulation of the system.

BSEC should take decisive motion to revive public belief within the inventory market. This consists of launching a radical investigation into Matiur’s case to uncover the total scope of the irregularities and determine different potential wrongdoers. The method of share allocation have to be made clear to forestall future abuses, guaranteeing that shares usually are not issued at discounted charges or with out correct fee.

The scandal has uncovered the fragility of investor confidence in Bangladesh’s inventory market. To rebuild this confidence, regulatory authorities and the federal government should collaborate to strengthen the authorized and regulatory framework governing inventory market operations. This entails closing loopholes that permit for such irregularities and guaranteeing that every one monetary transactions are reported precisely and transparently.

Auditors and regulators ought to be empowered and adequately resourced to detect and deal with discrepancies successfully. By enhancing oversight and enforcement mechanisms, the BSEC can deter future misconduct and promote a tradition of accountability inside the monetary sector.

The ramifications of Matiur Rahman’s actions prolong past the inventory market, reflecting broader societal points. The manipulation of the monetary system by highly effective people exacerbates financial inequality and undermines the rules of equity and justice. When influential figures exploit their positions for private acquire, it erodes public belief in establishments and fosters cynicism concerning the prospects for real reform.

To handle these systemic points, there have to be a concerted effort to advertise moral conduct and integrity in any respect ranges of presidency and enterprise. This consists of implementing stringent anti-corruption measures, fostering a tradition of transparency, and holding people accountable for his or her actions, no matter their standing or connections.

Matiur Rahman scandal has proven a highlight on the pervasive corruption and manipulation inside Bangladesh’s inventory market and monetary sector. Addressing these points requires a multi-faceted method involving regulatory reform, enhanced oversight, and a dedication to moral governance. By taking decisive motion to carry wrongdoers accountable and selling transparency, Bangladesh can restore confidence in its monetary establishments and create a fairer, extra equitable marketplace for all traders.

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