BOND Scam: Salman Rahman barred from stock market for life

The Bangladesh Securities and Exchange Commission has declared Salman F Rahman, former adviser to deposed prime minister Sheikh Hasina, unwanted for life in the stock market for misleading investors with a deceptively named bond.

The same punishment has been handed down to his son, Ahmed Shayan Fazlur Rahman, and former BSEC chairman Prof Shibli Rubayat-Ul-Islam for their involvement in the scam.

In a press release issued yesterday, the regulator said the trio deceived investors by naming a bond "IFIC Aamar Bond", creating the false impression it was issued by IFIC Bank, when the actual issuer was Sreepur Township Ltd.

The Daily Star exposed the irregularities in a report titled "Aamar Bond not IFIC's", published on Nov 23, 2023.

However, it took the BSEC until after the fall of Hasina's Awami League government to form an inquiry committee in October last year over irregularities in the stock market, including the issuance of the IFIC Aamar Bond.

The decision to declare Salman, Shayan and Shibli persona non grata was based on the committee's findings.

Salman has also been fined Tk 100 crore, while Shayan faces a Tk 50 crore fine.

Beximco Ltd and SFR Real Estate Ltd had collectively contributed 25 acres of land to form a joint venture on a revenue-sharing basis with Sreepur Township Ltd.

The owners from Beximco were Salman and Shayan, respectively vice-chairman and adviser of the industrial behemoth.

Both sat on the board of IFIC Bank as well: Salman as the chairman and Shayan as the vice-chairman.

Shibli, a former Dhaka University professor, was working as BSEC chairman at the time of the issuance of the bond.

Salman and Shibli are currently behind bars on different charges related to the July uprising atrocities and financial irregularities.   

A senior BSEC official, requesting anonymity, told The Daily Star that the action followed the inquiry committee's

recommendations. He added that the trio will be barred from participating in the stock market, even through intermediaries.

According to the BSEC, it had approved the "IFIC Guaranteed Sreepur Township Green Zero Coupon Bond" with a face value of Tk 1,500 crore and an issue price of Tk 1,000 crore. 

Sreepur Township Ltd, a real estate company, issued the bond by offering eye-popping returns to raise funds for a gigantic housing project in Gazipur.

It applied to raise the funds in 2023, just a month after it was incorporated as a private limited company. At the time, its authorised capital was Tk 500 crore and paid-up capital Tk 335 crore. Of the paid-up capital, Tk 248 crore was withdrawn in the name of land development and purchase -- a move the commission called "questionable".

Despite IFIC Bank not issuing the bond, it was widely promoted as "IFIC Aamar Bond" in advertisements.

"In this way, it attracted investors by means of fraud," the BSEC said in the press release.

The commission also fined Emerging Credit Rating Ltd Tk 10 lakh for its role in rating Sreepur Township Ltd.

Imran Ahmed, CEO of IFIC Investments Ltd and arranger of the bond, has been banned from the market for five years.

The BSEC has also issued warnings to IFIC Bank and its independent directors: ARM Nazmus Sakib, Md Golam Mostofa, Zafar Iqbal, Quamrun Naher Ahmed, and Shudhangshu Shekhar Biswas.

Prof Shaikh Shamsuddin Ahmed, the then BSEC commissioner, has also been declared unwanted.

The inquiry committee further found abuse of regulatory authority in the approval of the Beximco Secured, Convertible, Asset-Backed Green Sukuk worth Tk 300 crore.

According to the BSEC, some rules and regulations were waived during the Sukuk's approval. The commission also granted multiple subscription extensions after the Sukuk failed to attract general investors. The issuer company abused its powers in securing the extensions, the BSEC said in the press release.

The inquiry committee has recommended further investigation by the BSEC and punitive measures against those involved in the Sukuk irregularities.