Deadlock over BSEC new chairman’s alleged ties to ousted Hasina govt

A stalemate has arisen at the Bangladesh Securities and Exchange Commission (BSEC) over its newly appointed chairman M Masrur Reaz as employees have expressed their displeasure with him.

The Financial Institutions Division issued a notification on August 13 confirming Reaz's appointment for a four-year term.

However, he did not assume office yesterday (14 august), as the BSEC officers' welfare association decided not to welcome him, alleging that he had connections to the ousted Sheikh Hasina government.

The controversy follows the recent resignation of Shibli Rubayat-Ul Islam, a banking and insurance professor and an active member of the Blue Panel – a platform of pro-Awami League teachers at Dhaka University.

Rubayat, who was appointed for a second four-year term last April, resigned from his post as chairman last Saturday night, just days after the fall of the Awami League government in a student-led uprising.

Masrur Reaz was appointed as chairman on Tuesday, two days after Rubayat's resignation. Notably, Reaz's father, the late Riaz Uddin Ahmed, was an advisor to BNP Chairperson Khaleda Zia, also a former prime minister.

Meanwhile, the notification regarding Reaz's appointment has been removed from the Financial Institutions Division's website.

Officials indicate that the division has decided to investigate the matter due to some complaints about him.

Md Rashidul Alam, the personal assistant to the previous BSEC chairman, said, "The new chairman will inform us when he assumes office. However, there have been no updates on this matter as of 5pm yesterday."

Shibli Rubayat-Ul Islam did not return to the office after the fall of Sheikh Hasina's government on 5 August.

On 8 August, BSEC staff and employees voiced their concerns, stating that the appointment of the chairman or commissioners should not be based on political considerations.

They argued that the commission should select experienced senior or retired officers for these positions, as discussed in a meeting of the BSEC officers' welfare association.

The BSEC officers' welfare association did not react positively to the announcement of the new chairman of the commission.

In a meeting held on Tuesday, the association decided that the employees would not welcome any controversial individual with ties to the outgoing government into the office.

Officials, who wished to remain anonymous, emphasised that the government should select the right person to lead the capital market's development.

This demand arises from concerns that previous appointments based on political affiliations have hindered the market's progress. Instead of fostering growth, these appointments have led to various irregularities. Consequently, the association opposes the appointment of any individual with political ties as chairman.

According to market insiders, the stock market's structure has been severely weakened over the past 15 years. The reforms that have been implemented have primarily benefited racketeers and money launderers, while ordinary investors have suffered significantly.

Frequent changes in laws have also driven away foreign investors. The market's inability to retain foreign investment is further worsened by the lack of listings from multinational and well-established companies. Additionally, confidence among investors at all levels has eroded due to the absence of exemplary punishment for fraudsters.

Over the past 15 years, the politicisation of companies, stock exchanges, intermediaries, and other market-related institutions has further destabilised the market.

The imposition of a floor price has prevented the stock market from functioning naturally, rendering it virtually inactive for extended periods.

Given the current economic downturn, both domestically and globally, restoring confidence in the stock market has become a significant challenge, according to those familiar with the situation.

The BSEC officers' welfare association said the new chairman is closely associated with the outgoing government's private sector adviser, Salman F Rahman.

The association argued that since the working environment at the commission will not be favourable for a controversial figure, the notification issued regarding his appointment should be cancelled.

The association emphasised that no political figure, or anyone under their influence or associated with them, should be allowed to use the commission's leadership to implement a political agenda.

They warned that any attempts to shift the responsibility for their actions onto the commission's officers, discredit the commission, and harm the capital market must be prevented.

In light of this, the officers and employees urged the relevant authorities to appoint an honest, qualified, experienced, non-political, and non-controversial individual to lead the capital market.

They called for the formation of a search committee to find such a candidate, following the cancellation of the current notification.

On Monday, the DSE Brokers Association also demanded the formation of a high-powered investigation committee to uncover the irregularities and corruption that occurred during the tenures of former BSEC chairmen Khairul Hossain and Shibli Rubaiyat.