Thursday, 7 July, 2022

Fraud in name of commodities exchange; Economists laud BSEC notice on two companies

  • Sun Online Desk
  • 22nd May, 2022 10:58:35 PM
  • Print news
Fraud in name of commodities exchange; Economists laud BSEC notice on two companies

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Reliable Commodities Exchange Company and Buraq Commodities Exchange Co. have allegedly been involved in commodities exchange business with the licences of gold business.

Bangladesh Securities and Exchange Commission (BSEC) has sought clarification from the two companies as they are running commodities exchange business without approval, according to a letter seen by the Daily Sun.

The stock regulator took the move as any commodities exchange in ‘future contract’ model must be approved by the BSEC as per the ordinance of 1969.

 “At this stage, you (the companies) are requested to explain your position with regard to offer business through commodity future contract without approval from the commission or without being a member of a stock exchange (which is yet to start or got approval by the commission) within 7 working days of issuance of this letter,” says the letter signed by Md Mosavvir Al Ashick, assistant director of the BSEC.

A commodities exchange is a legal entity that determines and enforces rules and procedures for trading standardised contracts and related investment products.

BSEC Chairman Prof Shibli Rubayet Ul Islam said the regulator has sought information about the companies as they notified about the commodities business by the ventures.

 “From BSEC, we have been working to flourish commodities exchange business in the country. However, these companies (Reliable and Buraq) are doing business without any approval,” Prof Shibli told the Daily Sun.

It’s learnt that Buraq Commodities Exchange set up an office in Rangpur and running different packages of commodities luring the people with higher profits.

Rasheq Rahman, a member of the Awami League subcommittee on information and research, and cricketer Shakib Al Hasan are behind the ventures, sources said.

The BSEC has issued the letter on May 16 to the managing directors of the companies, seeking clarification of their business.

Asked about the names of the managing directors of the two companies, Rasheq kept mum.

Besides this, BSEC informed the governor of Bangladesh Bank, Senior Secretary of the ERD and Secretary of Commerce Ministry of the violation.

Quoting section 8 (4) of Securities and Exchange Ordinance 1969, the BSEC said a person or company - not member of the stock exchange -- will be barred from entering commodity future contract business.

 “No person other than a member shall act as a broker or a [jobber or dealer] for any security not listed in the Stock Exchange,” the letter reads.

The BSEC reminded the yardstick of the “Commodity Futures Contract” saying it refers to agricultural, livestock, fishery, forestry, mining or energy goods, and product that is manufactured or processed from any such goods.

Shakib inaugurated the showroom of Curious Life Style in Banani of the capital along with his business partner Rasheq Rahman on April 22 this year.

The Buraq Commodities took licence from Bangladesh Bank as an authorised dealer while the company runs commercial activities with gold bar setting up offices in Dhaka, Rangpur and Cumilla.

Regarding the letter, BSEC Commissioner Shaikh Shamsuddin Ahmed said the regulator seeks information about the companies having suffix of Commodities Exchange in names.

 “We want to know about the business of the companies. If anyone involves in trading in ‘future contract’, the venture should be approved by the BSEC. None but BSEC can issue licence of the ‘future contract’ business model,” he told the Daily Sun.

Economist Prof Abu Ahmed has appreciated the courageous role of BSEC in taking initiative against the ventures run without approval.

 “All should do business with licence. If anyone does business without approval, it should be addressed. There is no chance to compromise with the regulation,” he said.

Regarding the letter, Reliable Commodities Exchange Co Limited’s business partner Rasheq Rahman said the allegation of letter is not clear to him.

 “The allegation is not clear (in letter). We are doing business following local laws and regulations. If we understand the allegation, we will reply, otherwise not,” Rasheq told the Daily Sun.

He claimed that the companies are not involving in such business though having ‘commodities exchange’ in names.

Buraq Commodities Exchange Co reportedly got approval as a dealer from the Bangladesh Bank on November 28, 2019.

The company already started importing gold bars and ornaments marketing those through its Dhaka, Rangpur and Cumilla offices.