Beximco Group is getting the short end of the stick in the capital market amidst moun-tains of allegations including share manipulation and shady investments through individuals and companies linked to the company. 

As a natural concomitant of blanket manipulation, Beximco is now facing intense pressure in the capital market as multiple investigations and regulatory actions converge.

From the suspension of stockbroker and stockdealer licence renewals to a lifetime ban on its chairman, allegations of bond-fund misuse, and probes into the use of bank loans for market manipulation, the conglomerate now faces an unprecedented level of scrutiny.

Three Beximco companies are currently listed on the stock market: Bangladesh Export-Import Company Ltd, Beximco Pharmaceuticals, and Shinepukur Ceramics.

Most recently, the Bangladesh Securities and Exchange Commission (BSEC) cancelled the renewal of the stock-dealer and stock-broker certificates of Beximco Securities Ltd (TREC-178) of the Dhaka Stock Exchange (DSE).

BSEC spokesperson Abul Kalam Azad told the Daily Sun that the renewal was rejected because Beximco Group Chairman Salman F Rahman remains on the company’s board, which legally bars the process.         

However, the account holders will not face any hassle. Under BSEC rules, if a brokerage house’s operations are suspended, investors may transfer their BO accounts elsewhere to continue trading.

On 30 July this year, BSEC imposed a lifetime ban on Salman F Rahman over allegations of irregularities, corruption, fraud, and money laundering, disqualifying him from any securities-related activity.

Azad said this prohibition makes certificate renewal for Beximco Securities legally impossible, leaving the company’s trading operations suspended.

Following the political changeover on 5 August last year, Salman F Rahman was de-tained and is currently in prison facing a murder case. Despite this, Beximco Securities submitted its renewal application with his signature obtained through lawyers - an act BSEC deemed illegal, prompting immediate rejection.

The board of Beximco Securities comprises Beximco Holdings, represented by Salman F Rahman, and SS Exports, represented by Osman Kayser Chowdhury.

Professor Abu Ahmed, chairman of the Investment Corporation of Bangladesh (ICB) and a leading capital market analyst, said shutting an institution because of an individual harms the investors, arguing that the firm could have operated without Rahman’s involvement.

Mizanur Rahman, president of the Bangladesh Capital Market Investors’ Unity Council, said those alleged irregularities were committed by individuals, not the companies themselves.

He added, “Salman F Rahman has already been brought under the purview of the law, and he will face legal consequences accordingly. However, halting trading of all Beximco-linked companies listed in the capital market is not a sound decision. The BSEC should remove those involved in market manipulation from the relevant institu-tions and appoint new boards of directors who will act in the best interest of the investors.”

Tk 6,797 crore allegedly invested using bank loans

On 10 October, the Bangladesh Financial Intelligence Unit (BFIU) reported that eight institutions and 34 individuals linked to Beximco Group invested Tk6,797 crore in the capital market, allegedly using loans taken under fake names and shell entities from IFIC Bank and others.

BFIU suspects these funds were used to artificially inflate share prices. BSEC says the information is under review and punitive action is being taken where laws were violated.

Probe into use of Tk4,500 crore from two bonds

In September, BSEC formed two committees to investigate whether funds raised through two major Beximco-related bonds were properly utilised: the Tk3,000 crore Beximco Green Sukuk “Al Istisna” (2021) and the Tk 1,500 crore IFIC-Guaranteed Shreepur Township Green Zero-Coupon Bond (2024).

‘IFIC Amar Bond’ deception

BSEC fined former IFIC Bank Managing Director Shah Alam Sarwar Tk5 crore for misleading investors through irregularities and false promotion of the Shreepur Township Zero-Coupon Bond.

Although the bond belonged to a Beximco subsidiary, it was marketed as “IFIC Amar Bond,” leading investors to believe it was issued by IFIC Bank.

The Anti-Corruption Commission has filed cases against Salman F Rahman, his son Shayan Fazlur Rahman, and 30 others. Regulators also termed the collection of Tk1,000 crore for the Gazipur housing project fraudulent.

Share-price manipulation

A Dhaka Stock Exchange investigation found that nine Beximco-linked entities and individuals artificially inflated Beximco Ltd’s share price. They were fined a total of Tk428 crore.

Apollo Trading, Jupiter Business, Crescent, and Tradenext International were fined Tk114 crore collectively. BSEC reported fines of Tk22.5 crore for Jupiter Business, Tk15.01 crore for Apollo Trading, Tk4.01 crore for Tradenext International, and Tk73 crore for Crescent.

Declared unwelcome

On 30 July, BSEC declared Beximco Vice-Chairman and former IFIC Bank Chairman Salman F Rahman, his son Ahmed Shayan Fazlur Rahman, and former BSEC Chairman Professor Shibli Rubayat-Ul-Islam permanently unwelcome in the capital market.

Former BSEC Commissioner Sheikh Shamsuddin Ahmed and former IFIC Investments CEO Imran Ahmed were also banned for five years.

Alongside the lifetime ban, BSEC imposed Tk150 crore in fines on Salman F Rahman and his son for irregularities during the fundraising processes of both the IFIC-Guaranteed Shreepur Township Bond and the Beximco Green Sukuk.

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