The Bangladesh Securities and Exchange Commission (BSEC) has decided to investigate the irregularities and legal violations of KH B Securities Ltd. (TREC No. 143), a brokerage house and TREC holder of the Dhaka Stock Exchange (DSE).

A three-member investigation committee has been formed to examine the overall activities of the intermediary institution in the country’s capital market. The committee has been instructed to submit its investigation report to the BSEC within 60 working days under several conditions.

It has been learned that KH B Securities Ltd. took an unsecured loan of Tk 8 crore from International Leasing and Finance Ltd. without any formal contract. The committee formed by BSEC will investigate this matter.

Recently, an order in this regard was issued by the Market Intelligence and Investigation Division of BSEC. The order has been sent to the managing director or chief executive officer of KH B Securities Ltd.

The members of the investigation committee are: Md. Yusuf Bhuiyan, Additional Director of BSEC; Md. Kamal Hossain, Assistant Director of BSEC and Mohammad Ikram Hossain, Manager of DSE.

The Bangladesh Securities and Exchange Commission believes that, for the greater interest of the capital market and general investors, it is necessary to conduct an investigation into the allegations against KH B Securities Ltd.

For this reason, under the powers given in Section 21 of the Securities and Exchange Ordinance, 1969, and Section 17(a) of the Bangladesh Securities and Exchange Commission Act, 1993, three officials from BSEC and DSE have been appointed to carry out the investigation against the brokerage house. The investigators will complete their work within 60 working days from the date of the order and submit a report to the Commission.

KH B Securities Ltd. allegedly took an unsecured loan of Tk 8 crore from International Leasing and Finance without a formal contract. This issue will be examined by the investigation committee. The committee will review the adjustment of unverifiable lease accounts. It will also investigate unsecured investments in unquoted shares amounting to Tk 20 crore 30 lakh.

Additionally, the committee will examine potential regulatory risks related to shareholder P & L International Ltd., and review non-compliance issues including filings with the Registrar of Joint Stock Companies and Firms (RJSC) since March 2019. Other relevant matters will also be scrutinized by the investigation committee.