UFS-Pragati Life Unit Fund gets BSEC nod for winding-up

The Bangladesh Securities and Exchange Commission (BSEC) has approved the winding-up proposal for the UFS-Pragati Life Unit Fund, a mutual fund.

Bangladesh General Insurance Company (BGIC), trustee of the fund, disclosed the regulatory approval in a statement today (15 September), citing a BSEC letter dated 9 August.

As trustee, BGIC has begun the process of liquidating the fund in accordance with the Bangladesh Securities and Exchange Commission (Mutual Fund) Rules, 2025. Further directives on asset realisation and investor settlements are expected from the trustee in due course.

The open-ended mutual fund was sponsored by Pragati Life Insurance, which maintained an investment of Tk98 lakh in the vehicle, while management responsibilities rested with Universal Financial Solutions Limited (UFS). 

The liquidation follows years of profound regulatory investigations and financial scandals surrounding the asset management company. Stock market regulators first unearthed financial misappropriations by UFS officials, including Managing Director Syed Hamza Alamgir, back in 2022.

The malfeasance widened significantly when the BSEC moved to file cases against top executives for laundering Tk170.69 crore across multiple open-ended portfolios, including the UFS-Bank Asia Unit Fund, UFS-IBBL Shariah Unit Fund, UFS-Padma Life Islamic Unit Fund, and UFS-Popular Life Unit Fund. 

In December 2023, the Anti-Corruption Commission (ACC) filed a formal case against 24 individuals, implicating high-ranking UFS personnel, officials from the Investment Corporation of Bangladesh who served as fund trustees, and independent auditors for embezzling Tk311 crore of investors' funds.

According to ACC case filings, Syed Hamza Alamgir and his co-accused executed coordinated forgeries, systematically routing investments through unauthorised bank accounts and business entities to obscure the illicit origins of the money. 

Investigators documented widespread regulatory breaches, which included showing Tk59.40 crore in unauthorised investments, generating Tk148 crore in fake fixed deposit receipts, and failing to deposit Tk63.87 crore accrued from share sales back into the fund. Additional siphoning involved millions collected under the guise of management and trustee fees. 

The sweeping financial fraud also prompted the securities regulator to penalise audit firm Ahmed Zaker and Co, barring them from the stock market for collaborating in the systematic embezzlement of public savings.