Financial Reporting Council chairman asked to explain rule breach

The finance ministry has asked the Financial Reporting Council chairman to explain how he took an advance beyond the permissible amount from the institution's bank account by breaking rules.

In a show cause letter on 28 August, the ministry said Md Hamid Ullah Bhuiyan withdrew Tk10 lakh from the council's account at the Mohakhali corporate branch of Pubali Bank with a cheque on 18 August, 2021.

The letter – signed by ASM Lukman, a deputy secretary of the ministry – mentioned that the council had already informed the authorities that the chairman took the amount as salary advance, which was adjusted later.

However, according to the Delegation of Financial Powers, Budgetary Central Government institutions are not permitted to approve advance payment of more than Tk7 lakh. In addition, there is no opportunity for cash transactions in the case of payment of a large amount of money, as mentioned in the letter.

"Therefore, an explanation has been sought as to how the cash withdrawal of Tk10 lakh was approved," reads the letter.

Md Hamid Ullah Bhuiyan was not available to comment on this matter.

The council was formed in 2017 under the Financial Reporting Council Act in light of the recommendations placed after the capital market debacle in 2010. There were many allegations against the auditing firms about manipulating financial statements.

Bhuiyan, a professor of Accounting and Information Systems at the University of Dhaka, joined the council as its chairman in 2020 for the following four years.

The post of the chairman of the auditing watchdog remained vacant for the previous few months after the expiry of the tenure of its first Chairman CQK Mustaq Ahmed.

The council seeks to promote transparency and integrity in business by setting its target to work for investors and others who rely on company reports, audits, and high-quality risk management.