Tk 10cr fine slapped on AB Bank
AB Bank's merchant banking wing was fined Tk 10 crore yesterday for disbursing excess margin loans in violation of securities rules.
The penalty is the highest the regulator has imposed on a listed company since 2001.
The Securities and Exchange Commission (SEC) also asked the merchant banking wing to submit the fine to the commission within the next 15 days.
Managing director of AB Bank could not be contacted over his cell phone for comments despite repeated attempts.
After an investigation the SEC found AB Bank's merchant banking wing disbursed around Tk 528 crore loans against its paid up capital of only Tk 57 crore during mid 2007 when stock market experienced an abnormal bullish trend due to glut of liquidity stemming from excess margin loans.
The wing mainly disbursed the loans among its employees and their relatives.
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