Global investors including JPMorgan eye Bangladesh but need trust in audits: Khosru

Highlights:

• Finance Minister Amir Khosru Mahmud Chowdhury said JPMorgan and other global investors are interested in Bangladesh, but trust in accurate audit reports is essential for investment.
• He said weak institutions, banking indiscipline, capital outflow, and incorrect stock market listings have created a capital deficit in the financial system.
• Dr Rashed Al Mahmud Titumir called for stronger transparency, accountability, and strict action against financial misreporting to improve investor confidence

Global fund managers, including JPMorgan, are interested in investing in Bangladesh, but there is no alternative to accurate and reliable audit reports to build their confidence, Finance Minister Amir Khosru Mahmud Chowdhury said.

He said he meets fund managers every day, and they are showing interest in coming to Bangladesh. 

He made the remarks as the chief guest at the FAR Summit titled "Trustworthy financial reporting: what really matters", organised by the Financial Reporting Council (FRC) at Pan Pacific Sonargaon Hotel in Dhaka today (20 May).

The minister said the country's economy has gone through turbulent times in recent years. He added that economic management and financial management, especially institutions, had almost stopped functioning and became dysfunctional. As a result, watchdog and regulatory bodies did not perform their duties properly.

Amir Khosru said, "We are at a crossroads. Where we go will depend on the functioning of institutions." He also said the financial ecosystem has almost collapsed, particularly in the banking sector where indiscipline has taken place and money has been taken out of banks. He added that companies were listed on the stock market with incorrect information.

He added that these irregularities have led to a capital deficit. The private sector is facing a serious capital shortage, and the banking sector is also suffering from deficits.

The finance minister stressed that restoring investor confidence requires ensuring transparency and accountability in the financial sector through joint efforts.

Special guest Dr Rashed Al Mahmud Titumir, adviser to the prime minister on finance and planning, said that due to distortion of information in the past, genuine entrepreneurs were harmed while those providing false information gained unfair advantages.

He said international reports have raised questions about the reliability of Bangladesh's financial reporting system, which is why expected foreign direct investment did not come.

He added that audit firms must not act as clients' subservient bodies. The aim is to ensure transparency and accountability so that all investors feel secure.

He also said strict punishment mechanisms against intentional misreporting and manipulated valuations have been empowered through full legal and administrative authority of the FRC.

Finance division secretary Dr Md Khairuzzaman Mazumder chaired the event, which was also attended by BGMEA president Mahmud Hasan Khan and BTMEA vice-president Abul Kalam.

Auditing breakdown and financial misconduct

The finance minister said Bangladesh's banking and capital market sectors have been pushed to the brink of crisis by years of plunder, poor economic management, weak financial discipline, and the failure of regulatory institutions, reports UNB.

He said the country's auditing and reporting ecosystem has nearly broken down, enabling a range of financial crimes, including money laundering through banks, loan fraud using false information, and the listing of fraudulent companies on the stock market.

Khosru added that companies that misrepresented themselves to enter the stock market have, in many cases, grown into large firms, which is discouraging genuinely transparent companies from entering the market. He stressed that without restoring investor confidence in balance sheets and audit reports, meaningful foreign investment cannot be attracted.