The New Nation - Internet Edition

BUSINESS REPORT

The Securities and Exchange Commission (SEC) has temporarily frozen 2,436 beneficiary owners' (BO) accounts which were opened with different branches of Al-Arafah Islami Bank using the same address when the Premier Bank floated its initial public offering (IPO).

The subscription of Premier Bank IPO took place in March of 2007 after it was earlier cancelled for BO account forgery in February 2005 that subsequently led to the removal of the then Premier Bank Managing Director M. Abdul Mazid by the central bank.

The SEC, in cooperation with the Bangladesh Bank analysed various documents and data of those BO accounts and primarily identified that the accounts were not opened in line with the securities rules during Premier Bank IPO, making the commission suspicious.

"The BO accounts will remain frozen until further notice but credit can function and the account holders already in possession of shares will land in trouble if irregularities are proved against them," Farhad Ahmed, executive director of the SEC told reporters on Sunday.

He said, during the Premier Bank IPO, the BO accounts were opened using the address '137, Tejgaon Industrial Area, Dhaka' under different branches of Al Arafah Islami Bank.

"The enforcement department of the SEC will summon those account holders to hear further," Farhad said adding that these steps will act as deterrent for those who will intend to do so in future.

He said, if their involvement is found unlawful, they might face two types of punishment- civil or criminal cases.

Under the civil case, the maximum financial penalty is Tk 10 lakh and under the criminal case, the maximum financial penalty is Tk 10 lakh or five-year imprisonment or both, he added.

Currently, there are around 1.5 crore BO accounts in the country's stock markets.