The Bangladesh Securities and Exchange Commission (BSEC), the regulator of the stock market, has mandated stringent measures against eight brokerage firms. These firms have been identified as having a shortfall in their net asset value (NAV), which contravenes the standards established by the Securities Act. Among these firms is Monarch Holdings Limited, which is owned by the famous cricketer Shakib Al Hasan.

The BSEC identified these shortcomings during a recent investigation. Following the findings of the investigation report, the BSEC has issued a formal communication to the Dhaka Stock Exchange (DSE), the primary stock market in the country, requesting it to take appropriate action against the implicated brokerage firms.

The eight firms involved in the investigation include Monarch Holdings Limited, Mir Securities Limited, Columbia Shares and Securities Limited, Wingsfin Limited, Fariha Securities Limited, Assurant Securities and Management Limited, Matrix Securities Limited, and Tasia Securities Limited.

Notably, Shakib Al Hasan, a globally recognized cricketer, serves as the chairman of Monarch Holdings Limited. The managing director of the company is Kazi Sadia Hasan, who is the spouse of Abul Khair Hiru, the Deputy Registrar of the Cooperatives Department. In contrast, Mir Securities Limited is chaired by Mir Nasir Hossain, who is also the managing director of the business entity Mir Akhtar Hossain Limited.

The letter from the BSEC indicated that the investigation into the financial status of these eight brokerage firms was initiated at the request of the DSE. This indicates that they have not adhered to the net asset requirements outlined in Rule 7(4) of the “Trading Right Entitlement Certificate (TREC)” Rules, 2020.

Under the law, it is essential for every brokerage firm to maintain a net asset value exceeding 75 percent of its paid-up capital. Non-compliance with this requirement could pose financial risks to the institution and potentially jeopardize the interests of investors.

BSEC believes that strict adherence to this rule will strengthen the brokerage houses financially, protect investors’ money and maintain transparency in the market. According to the rules, there is a provision for cancellation of the TREC certificate if the conditions are not met.