BSEC orders Tamha Securities to sell off assets for settling clients’ claims

In a move to settle the claims of the defrauded clients of Tamha Securities, the Bangladesh Securities and Exchange Commission (BSEC) has instructed the firm's management to sell off assets.

The sale will be implemented according to the deed agreement among the directors of the company. 

As per the agreement, Tamha's Managing Director Dr Md Harunur Rashid will sell his houses in Gulshan, Dhanmondi, and Savar. Also, the company will sell its Trading Rights Entitlement Certificate (Trec), Rashid informed the BSEC.

The Business Standard tried to contact Rashid for comments regarding the issue over the phone but he did not respond to calls.

Sources said the total value of the assets is approximately Tk65 crore.

After completion of the sale, Tamha's management will give the fund to the Dhaka Stock Exchange (DSE) within 31 May. The DSE will then settle the clients' claims through examination. 

The premier bourse will also send updates to the BSEC every week in this regard.

The embezzlement  

Tamha Securities secretly introduced a parallel software database to report fake cash and securities balances, and fake buy-sell order execution updates to clients and the regulator.

Cash dividends that the defrauded investors were supposed to receive from listed companies each year, were being sent to their bank accounts by the broker itself as it had previously sold the shares off, leaving investors in the dark.

Tamha Securities embezzled at least Tk64 crore of client assets as acknowledged by its managing director, while a BSEC investigation suggests that the amount might be as high as Tk140 crore.

Clients' hardships

Earlier, a group of victim investors spoke at a press conference and blamed the DSE and BSEC for their lack of monitoring over Tamha's activities.

The retail investors urged the BSEC to take measures so that they get their life-long savings back.

Mojibur Rahman, a retired government employee, gave Tk13 lakh from his retirement benefits to his son for investing in stocks. The son opened his beneficiary owners (BO) account with Tamha Securities in 2009.

After the news of the company's embezzlement in late 2021, the 70-year-old man has been moving here and there seeking a remedy but was not able to find one.

The situation of small investors like Fakhrul Islam, Rawshon Ara, and many others, who also spoke at the conference, was nothing better.

Mojibur, Fakhrul, and Rawshon Ara also demanded that there be no repetition of such forgery in the brokerage industry.

What experts have to say

Stock market experts said the stock exchanges should have real-time entry access into the brokerage firms' IT systems for effective monitoring, and also, they should be made a signatory in the brokers' consolidated customer bank accounts so that no client money is siphoned.

DSE has an investor protection fund and it should be strengthened so that the bourse itself can initially clear off any such liability of any brokerage firm, and later try to recover from the responsible member, they added.