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Clients’ Money Embezzlement

So far 36 affected stocks investors claim Tk 16.34cr

Staff Correspondent | Published: 23:14, Jul 03,2020

 
 

Thirty-six affected investors have so far claimed Tk 16.34 crore in investments in Crest Securities Limited, a brokerage house of the Dhaka Stock Exchange, after the owners of the brokerage house went into hiding after embezzling clients’ money.

A DSE inquiry team updated the bourse’s board of directors on the claims at a meeting on July 2.

Earlier on June 24, the clients of Crest Securities found the office of the brokerage house locked and came to know that its chairman and managing director Md Shahid Ullah and the other directors fled with their money.

The incidence bewildered investors, market regulators and other stakeholders.

On June 28, the DSE asked the affected investors to inform the bourse about their losses to settle the issue immediately.

The investors were given 15 days for claiming their money and shares.

Until July 2, 36 investors claimed Tk 16.36 crore and 52 claimed ownership of shares and 12 others claimed both shares and cash.

The value of the shares is yet to be estimated, DSE officials said.

Apart from them, five investors informed the DSE that they gave loans to the brokerage house.

The DSE primarily identified that there would not be a huge shortfall in the investors’ shares in the BO accounts as the bourse found shares worth Tk 82 crore with the Central Depository Bangladesh Limited.

DSE officials said that once the bourse received complaints from all the affected investors, it would know about how many shares the brokerage house had sold without informing its clients.

The bourse suspended the broker’s trading activities and depository participant account immediately.

It also requested the Bangladesh Bank to freeze bank accounts of the company and its directors.

DSE officials suspected that the owners went into hiding because of the pressure of creditors as the firm took a huge amount of loans at above 30 per cent interest rate from the creditors.

Crest Securities could not pay the interest to the creditors let alone the loans, the officials said.

Some of the affected investors have continued showing their grievances.

On July 2, they demonstrated in front of the National Press Club and demanded a quick return of their money and shares.

They also sought proper action against the brokerage house.

DSE officials said that the bourse strengthened its monitoring on the brokerage houses to prevent any such incident.

A number of brokerage houses are struggling to continue their business due to poor business activities.

Earlier on October 30 last year, the BSEC asked the DSE to confiscate licence of Shah Mohammad Sagir & Co after the brokerage house was charged with embezzling its clients’ money.

Besides, the BSEC fined many brokerage houses for shortfall in clients’ accounts and irregularities regarding margin loan activities.

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