High Court upholds Tk10cr fine, ban on ex-MD of Banco Finance
HC directs removal of Tk16cr penalty imposed on five of Hamdul’s family members
The High Court has upheld the decision of the Bangladesh Securities and Exchange Commission (BSEC) to impose a Tk10 crore fine and a five-year ban from the capital market on Mohammad Hamdul Islam, the former managing director of Banco Finance and Investment Limited.
The High Court bench of Justice Farah Mahbub and Justice Muhammad Mahbub Ul Islam dismissed the writ petition filed by Hamdul Islam challenging the decision of the BSEC on 30 April.
BSEC found that Hamdul Islam held around Tk34.49 lakh pre-IPO shares of different companies, where his firm served as the issue manager, in the name of his relatives and his wife, and earned profits from the shares in violation of Public Issue Rules which states that the issue manager or his affiliates cannot hold pre-IPO shares in any way.
In November 2022, the BSEC issued a ban prohibiting Hamdul Islam from participating in the stock market for five years, alongside imposing a fine of Tk10 crore on him.
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However, the High Court has directed the removal of the regulatory penalty of Tk16 crore imposed on five of his family members. This penalty had been imposed on both Hamdul Islam and his family members.
Barrister Sayed Mahsib Hossain, representing the BSEC along with Barrister AM Masum, said Hamdul Islam was found guilty of providing benefits to his relatives through his actions as an issue manager, thus violating the laws.
"The court upheld the BSEC verdict against him while releasing his family members from the penalty due to insufficient reasons provided for their involvement," he said.
However, any party can appeal again, he added.
Speaking to The Business Standard, Hamdul Islam said he would decide on appeal after a discussion with his lawyer.
According to BSEC sources, Hamdul Islam took advantage of several companies where he served as the issue manager, holding pre-IPO shares under the names of his relatives and wife. He also failed to cooperate with an enquiry committee formed by the commission.
Earlier in 2014, a chief executive officer of an investment bank, Kazi Saifur Rahman, was banned from all activities of the stock market for five years and fined Tk10 lakh after the BSEC found his involvement in share manipulation of Tallu Spinning Mills Ltd and Bangas Limited.
