A top regulatory official on Monday said an "unholy game" is going on in the capital market involving issuers, issue managers, audit firms, and the company management to cheat the public and state.
Professor Helal Uddin Nizami, a commissioner of the Bangladesh Securities and Exchange Commission, BSEC, said this alliance prepares fake financials and does spurious company valuation to manipulate stock prices.
But investors, who do not have enough education or knowledge about the market, blame the regulator for the manipulation, he said.
"We have to stop this unholy game now," he said.
He made the remarks while speaking at a panel discussion on "Putting Ethics at the Heart of the Finance and Investment Industry in Bangladesh."
The discussion was part of "Bangladesh Finance and Investment Summit 2020" organised by Chartered Global Investment Analyst and Bangladesh Institute of Capital Market in the city.
Mr Nizami said the capital market regulator is not responsible for the valuation and prices of shares.
"The regulator should not provide guarantee for the financial statements of a company," he said.
The issuer should take the main responsibility of such a nasty game, he said, adding that the second lies with the issue manager and the third with auditors and the company management.
He said audit firms are preparing several financial statements and auditors should be made responsible for this practice.
They must provide quality financial statements, he added.
The commissioner said most companies listed with the capital market make fake reports and multi-reports for different authorities and regulators.
To address the issue of multiple statements, the Financial Reporting Council will host a server where companies will submit a single financial statement.
"Now there is no way but create one server and prepare a single financial statement to keep that for all authorities," he said.
Speaking as the chief guest in the inaugural session, commission chairman Khairul Hossain said a well-functioning capital market depends on the trust of investors.
"A market without ethical standards will not be sustainable," he said.
The programme was addressed, among others, by CGIA Network Bangladesh acting president Saied Mahmud Zubayer, executive president of BICM Dr Nitai Chandra Debnath, chairman of CGIA Global Council Sandeep Kumar, country manager of ACCA Bangladesh Ahsanul Hoque Bashar, CFA Society Bangladesh Shahidul Islam and CFO of Dhaka Stock Exchange Abdul Matin Patwary.
