Kazi Sanaul Hoq’s appointment as the managing director of the Dhaka Stock Exchange has run into a spot of controversy after a group of directors alleged that a director tried to game the process to get him elected.
The episode comes at a time when stock investors’ confidence on the bourse is heading towards rock bottom.
The DSE board comprises 13 members: one MD, seven independent directors and five shareholder-directors.
A good number of directors shared with The Daily Star the behind-the-scenes manoeuvring to get Hoq, former MD of Investment Corporation of Bangladesh, to the top post of the premier bourse.
The DSE has been on the lookout for an MD for the last six months after the Bangladesh Securities and Exchange Commission (BSEC) did not extend the tenure of KAM Majedur Rahman despite several requests from the premier bourse.
“One director attempted to rig the selection process to get his beloved person to the position,” said a director requesting anonymity to speak candidly on the matter.
Normally, the nomination committee of the DSE makes a short list and sends the candidates’ curricula vitae (CVs) to the board members for evaluation.
The selected candidates are then called for a panel interview with the board and best individual is chosen, he said.
This time, the short listed persons’ CVs were not sent to the board, so they were not called for interview.
“This is a violation of the convention of MD selection process,” said another director preferring anonymity.
The accused board member, rather the kingmaker, managed the situation by saying that “the upper level” wanted Hoq, former MD of the state-run Investment Corporation of Bangladesh, as the MD, so the board must go for him.
The other person in the running for the post was Shafiqul Alam, former managing director of Jamuna Bank.
If Hoq was not chosen, there would be problems for the DSE, said the director quoting the kingmaker.
This compelled six of the seven independent directors and one of the local shareholder-directors to go for Hoq at the board meeting on Thursday.
The Daily Star contacted the accused board member, who evaded from giving a comment. After hearing out the correspondent he pretended that his phone was acting up and he hung up. He did not answer his calls after this.
The correspondent texted him for comment and the message was read by him but he chose not to reply.
Since the post of MD has been vacant for six months, there were 12 votes to be had at the meeting. Besides, the MD has no voting right.
The Chinese strategic partner is a shareholder-director and he joined in via video call. The consortium’s stance is to go for the majority and seeing that Hoq got seven in his favour, the Chinese representative chose to go with the former ICB MD too.
Three of the four local shareholder-directors of the DSE voted against Hoq as well as one of the independent directors.
In the end, Hoq’s nomination prevailed and his name was forwarded to the stock market regulator for approval.
“This is not a case of majority because most of the shareholder-directors are not supporting the approval and they are the ones who are better informed of the dynamics of the market,” said one of the aggrieved directors.
Besides, most of the independent directors are set to leave the DSE next month, he added.
The Daily Star contacted Abul Hashem, chairman of the DSE and an independent director, but he did not answer his phone.
Hoq was the MD of the ICB from 2017 to 2019. During his tenure, the company’s profits plunged to a 12-year-low.
ICB incurred losses of Tk 134.30 crore in the first quarter of fiscal 2019-20, when it had not seen losses for at least the last 12 years.
“How can we expect steady leadership from an individual who turned ICB into a loss-making concern?” asked an independent director.
So, his recruitment in the DSE will dampen stock investors’ confidence, he added.
Besides, an allegation was also submitted to the Anti-Corruption Commission against some of the officers of the ICB, including Hoq, for providing loans amounting to more than Tk 100 crore by breaching laws.
Hoq, who was previously the MD of Rajshahi Krishi Unnayan Bank and deputy MD of Agrani Bank, did not respond to calls and texts from The Daily Star yesterday.