RACE's rejoinder and our reply

RACE Asset Management has protested against a report by The Business Standard, titled "ICB to take RACE to court over Tk200cr mutual fund irregularities", published on 11 September, terming the news inaccurate and misleading.

In a rejoinder, the asset manager said the absence of crucial facts misleads readers and creates a one-sided narrative that unfairly undermines RACE's longstanding record of regulatory compliance in operating mutual funds.

RACE said the claim of Tk220 crore "losses" is misleading because the figures are unrealised, regulator-approved, and subject to corrective mechanisms already mandated by the BSEC (Bangladesh Securities and Exchange Commission). It created an impression as if the investments were illegal and the losses realised, irrevocable, and proven.

"That is simply not accurate, as the investments are unrealised, not final, and not the result of misappropriation or irregularities," the rejoinder read.

RACE also claimed that the report disregards ICB's dual role as trustee and custodian, which involved reviewing every financial statement and directly participating in the same investments.

It said, "The report overlooks the crucial role of ICB as trustee and custodian and instead places the entire weight of responsibility on RACE. Between 2015 and 2025, ICB reviewed and formally approved financial statements of the relevant funds on more than 40 occasions.

"These statements explicitly included the investments now being questioned (Padma Bank, Multi Securities and Services, Regent bond, and Best Holdings). To now allege 'mismanagement' without acknowledging ICB's own approval misleads readers about the oversight structure."

RACE further said the mutual funds it manages have a proven history of delivering dividends to investors. Since 2010, RACE-managed funds have paid over Tk1,800 crore in dividends, accounting for more than half of the entire mutual fund industry's distributions.

Our reply

We stand by our report, which is backed by documents of ICB, the trustee and custodian of RACE's funds. 

ICB has prepared and submitted a detailed report to the stock market regulator, and decided to sue the asset manager of the funds, mentioning violations and determining losses of Tk200 crore incurred in the funds.

As the violations by the asset manager contradict mutual fund rules, the trustee is moving to sue to protect investors' interests.

Against this backdrop, we sought comments from RACE and published RACE's responses alongside ICB's detailed reply to those comments.

Therefore, we reject the claim that the report was one-sided.

The ongoing legal dispute regarding breaches of securities rules is between the trustee and the asset manager. We only published the report based on ICB's findings.