The premier bourse and the securities regulator will ensure the security of the investments and funds of the clients of Crest Securities.
Dhaka Stock Exchange (DSE) on Sunday said this at a press briefing amid criticisms and tensions as the owners of Crest Securities remained absconding.
"We have found investors' shares worth Tk 820 million (in latest market value) in the portfolios maintained by the Crest Securities. The entire amounts of shares has been locked by the depository authority," DSE managing director KaziSanaulHoq told the press briefing.
"Investors will be allowed to transfer their own shares from Crest Securities to another brokerage firm," Mr. Hoq said.
Besides, the shortfall, if found, of the liabilities of the Crest Securities will be fulfilled by selling the brokerage house's TREC (Trading Right Entitlement Certificate) and its stakes found from the stock exchange, Mr. Hoq said.
As part of the demutualisation process, the Crest Securities' 75 per cent stake at the DSE has been locked in the Central Depository Bangladesh Limited (CDBL).
Crest Securities took loans from a private commercial bank keeping its 40 per cent stake in lien.
Asked, the DSE managing director said the exchange previously had urged the bank not to provide loans against stakes of the Crest Securities.
"We have also legal opinion in favour of using its stakes for paying investors' dues. Now the bank cannot demand the stakes of Crest Securities," said Mr. Hoq, adding that the bank will be a loser.
Asked whether the market would face any negative impact following the incident of Crest Securities, the DSE's managing director said they would be able to overcome it by ensuring the security of the investors' investments.
"Risk based capital adequacy will have to be maintained by the stock brokers. They will not be given much time to comply with the capital adequacy condition," the DSE managing director said.
Meanwhile, the Crest Securities' managing director Md. Shahid Ullah has sent a letter to the DSE managing director through email, saying that he remained abscondingdue to pressure from his personal lenders.
In this regard, the DSE managing director said the interest of the clients of the Crest Securities will get the first priority.
In reply to another question, he said the securities regulator would ensure the punishment of the owners of the Crest Securities.
The Dhaka Stock Exchange also held a board meeting on Sunday to set a plan for determining the liabilities of the Crest Securities after checking the demands made by its clients.
"We will publish an advertisement in the newspapers, seeking information regarding the dues of the clients of Crest Securities," said a DSE director after the meeting.
The DSE also took the decision of seizing all documents found at the offices of Crest Securities so that nothing can be erased or altered.
The DSE also asked its committee comprising representatives of its RAD department to submit a report on mismatch of investors' funds within five working days.
Meanwhile, the CDBL has provided shareholding reports of some 170 clients of the Crest Securities in last two days.
"After checking the reports, the clients can say whether their shareholdings were deviated or not. They will have to file complaints with the DSE if their shareholdings are affected," said the CDBL managing director ShuvraKanti Choudhury.
He said the CDBL has no role in changing the shareholdings of any investor.
Asked about any alteration in their holdings, Mr. Choudhury said instantly two investors alleged that their holdings were changed.
While speaking on the role of the CDBL in share transactions, Mr. Choudhury said they always provide shares against the trades following an order came through the exchange.
The securities regulator has also formed a three-member committee including two representatives from both the bourses to dig out the embezzlement of the investors' funds by the Crest Securities.
Meanwhile on the day, the Bangladesh Securities and Exchange Commission (BSEC) held an urgent meeting to discuss the measures taken to protect the clients of Crest Securities.
A BSEC official said the securities regulator has decided to resume its visits to the brokerage houses of the stock exchanges.
"The DSE will take necessary measures to ensure the investors' protection. Nevertheless, we have some responsibilities and we have decided to resume inspections to the brokerage houses," a top BSEC official said.
BSEC executive director Mohammad Saifur Rahman said that three committees will be formed comprising representatives from the stock exchanges and the securities regulator.
"These committees will conduct inspection in different brokerage firms. Consolidated customers' accounts will also come under the inspection of the committees," Rahman said.
mufazzal.fe@gmail.com