12/11/23, 12:24 PM DSE to pay defrauded customers from investors' protection fund | The Business Standard

MONDAY, DECEMBER 11, 2023

After its formation back in August 2014, this is the first time the DSE
Investors’ Protection Fund will be used

Rafiqul Islam
10 December, 2023, 10:30 pm
Last modified: 10 December, 2023, 10:32 pm

The country's premier bourse Dhaka Stock Exchange (DSE) is set to disburse
claims of the defrauded customers of four brokerage firms from the DSE
Investors' Protection Fund that was formed nearly a decade ago.

According to the DSE, 8,561 customers have filed claims totalling more than Tk200
crore till 1 October this year.

But for now, the DSE will disburse Tk25 crore, which is around one-eighth of the
total claim, on a pro-rata basis.

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12/11/23, 12:24 PM DSE to pay defrauded customers from investors' protection fund | The Business Standard

And, the amount will be disbursed in such a way that the clients of the brokerage
house that embezzled the most amount of money will get the highest portion, and
clients of the one that took the least amount will get the lowest portion.

The DSE will hand over the account payee cheques to the customers from today
through a program, and by the end of the week, all the affected customers will
receive the first phase payment through banking channels.

After its formation back in August 2014, this is the first time the DSE Investors'
Protection Fund, which was created to protect the interest of investors in case of
any default by brokerage firms, will be used.

Dhaka bourse's Managing Director ATM Tariquzzaman told TBS, "We will start
paying the affected investors from Monday."

"A large number of customers have filed claims against the brokerage firms.
Verifying the data, we will complete the disbursement of the funds on a pro rata
basis as soon as possible," he added.

The four brokerage houses that have been on the news for defrauding their
customers are Crest Securities, Banco Securities, Tamha Securities, and Shah
Mohammad Sagir & Company Limited.

According to DSE, the brokerage firms sold shares of their clients without
informing, and embezzled funds from the consolidated customers' accounts (CCA).

Therefore, the Bangladesh Securities and Exchange Commission, on 1 October this

year, directed the Dhaka bourse to settle the claims of the defrauded investors from
the DSE Investors' Protection Fund.

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12/11/23, 12:24 PM DSE to pay defrauded customers from investors' protection fund | The Business Standard

In June 2022, the DSE had settled some claims through Bangladesh Electronic
Funds Transfer Network (BEFTN). Till now, the bourse has disbursed Tk4.76 crore
to 431 investors.

The four brokerage firms

According to the DSE, Tamha Securities embezzled Tk139.67 crore by illegally using
added software and providing fake information to clients about their investment
status. Of the amount, Tk92.57 crore was cash and Tk47 crore securities.

In June 2021, the DSE suspended the trading of its member Banco Securities for the
embezzlement of Tk60 crore.

The bourse found a deficit of Tk128 crore in Banco's consolidated customer

account. Of this, Tk66.11 crore was cash, and Tk61.97 crore securities.

Crest Securities closed its operations and also shut down its office without any prior
announcement. The DSE found a deficit of Tk65.30 crore in the company's CCA. Of
this, Tk44.90 crore was cash, and Tk20.40 crore securities.

Finally, Shah Mohammad Sagir & Company that embezzled Tk13.74 crore was
suspended because of its failure in trade settlements.

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12/11/23, 12:24 PM DSE to pay defrauded customers from investors' protection fund | The Business Standard

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TBS Report
10 December, 2023, 10:00 pm
Last modified: 10 December, 2023, 10:26 pm

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