Former IFIC Bank MD fined Tk5 crore for misleading bond promotion
The penalty was imposed for violations of securities laws and regulations concerning the "IFIC Guaranteed Sreepur Township Green Zero Coupon Bond," which had a face value of Tk1,500 crore and an issue value of Tk1,000 crore
The Bangladesh Securities and Exchange Commission (BSEC) has imposed a Tk5 crore fine on Shah Alam Sarwar, former managing director of IFIC Bank PLC, for his involvement in irregularities related to the misleading promotion of a zero-coupon bond.
In a press release issued following a commission meeting today (4 November), the regulator said the penalty was imposed for violations of securities laws and regulations concerning the "IFIC Guaranteed Sreepur Township Green Zero Coupon Bond," which had a face value of Tk1,500 crore and an issue value of Tk1,000 crore.
The BSEC stated that IFIC Bank PLC served as the guarantor of the bond, while its subsidiary IFIC Investments Ltd acted as the adviser and arranger.
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The bond itself, however, was issued not by the bank but by Sreepur Township Ltd (STL), a real estate company that raised funds through the instrument. STL was linked to Salman F Rahman, former chairman of IFIC Bank and private sector investment adviser to the ousted Prime Minister Sheikh Hasina.
Despite this, the bond was promoted and advertised using the name "IFIC Amar Bond", creating the misleading impression that it was directly issued and backed by IFIC Bank.
The BSEC said such promotional tactics deceived investors into believing the bond carried the bank's full endorsement and guarantee, which was not the case.
The commission noted that such misrepresentation constituted a serious breach of securities laws and investor protection principles.
