Crest Securities calls it quits

The recent turmoil faced by clients of Crest Securities, a brokerage house of the Dhaka Stock Exchange (DSE), will be solved by selling the company's broker licence and assets, said DSE Managing Director Kazi Sanaul Hoq.

After Crest Securities closed down its head office and all other branches without prior notice last week, neither investors nor the country's premier bourse could communicate their concerns with the firm's managing director, Md Shahid Ullah, or any other senior official.

"We have already frozen shares and mutual fund units, totaling Tk 82 crore in value, of more than 21,000 investors who traded through the brokerage house," Hoq said.

However, investors are still allowed to trade their securities through linked accounts with any other brokerage firm.

The DSE managing director made these comments during an online press briefing.

Many shares were traded through the company but investors did not get their due returns.

Therefore, investors should inform the DSE of how much money is owed to them by Crest Securities so that the DSE can repay those clients after the company's broker licence and assets are sold, Hoq said.

Crest Securities' dealer account does not contain a significant amount of funds. However, the brokerage firm owns a stake with the DSE.

So, investors should not be concerned as the premier bourse will repay what is owed by selling these shares, according to Hoq.

Banks that previously provided financing to the managing director of Crest Securities have no authority to lend against the shares and have already been duly informed in this regard, he added.

The brokerage firm's financial condition seemed relatively stable as it did not even have a deficit in its consolidated account for the month of May, making the company's sudden collapse totally unexpected.

"We took steps after learning about the lack of communication between Crest Securities and its clients. As such, we informed the police force to prevent officials from the company from leaving the country," said Hoq.

Besides, the DSE asked the central bank to freeze over 10 accounts linked to the company.

This unforeseen incident will have a broader negative impact on the confidence of general investors. Therefore, the DSE is taking the situation seriously and will continue to focus on it until resolved, Hoq said.

"If we had known earlier that their client's cheques were dishonoured by the brokerage house, we could have taken action sooner. So, if any, there remains to be investors who have had their cheques dishonoured as such, they should inform the DSE," he added.