The Daily Star, Prothom Alo bin Beximco allegations

In a press conference yesterday, Vice Chairman of Beximco Group of Companies Mr Salman F Rahman branded The Daily Star and the Prothom Alo as the architects of the "Minus Two" theory during emergency rule.
We categorically deny the allegation and reject it as laughable.
Salman Rahman made several other vague and sweeping accusations against The Daily Star and Prothom Alo. He claimed that these two papers have been involved in a persistent malicious campaign against his company and have indulged in unethical journalism to malign his industries in order to prevent the materialisation of his companies ambitious growth plans.
We thoroughly reject this accusation and firmly state that we strongly adhere to the highest standards of ethical journalism and its norms. We have never reported on Beximco group of Companies without relevant proof and carried their versions and comments.
The fact is that Bangladesh has long suffered from the culture of loan default that has forced banks to charge one of the highest rates of interest in the world, preventing thousands of entrepreneurs from borrowing and investing. The default culture has been one of the biggest, if not the biggest, impediments to the growth of private sector in the country.
In perpetuating the malaise of default culture Beximco has been one of the oldest and by far the biggest player, being among the biggest defaulters over last two decades, totalling thousands of crores of takas.
Most naturally therefore Beximco Group of companies deserves and receives a very strict scrutiny from the conscious and independent media of the country as it does from The Daily Star and Prothom Alo among others.
The recent media attention was focused on them when DSE investigated the sudden share trading of a Z category company, Bextex, just before its AGM and declaration of dividend.
Regarding Salman Rahman's terming our reports as not correct on the point of declaration of dividend and asset re-evaluation, our reports were based on what the Dhaka Stock Exchange mentioned in its website, which can be still viewed today. Neither The Daily Star nor Prothom Alo had made its own judgment.
About the allegation of insider trading, we never accused Salman F Rahman or Beximco of indulging in it. Our report pointed out the unusual trading on that stock by two banks in close proximity of dividend declaration. Our report only brought out these facts to alert the public which we thought to be our journalistic duty to protect the interest of the investors. In the report we also mentioned that some people had called it a clever investment decision while others doubted it as insider trading. We must keep in focus the fact that Beximco owners were earlier directors of the said banks in question and had taken out crores of taka through over a hundred fake accounts in the 1990s which the Bangladesh Bank later detected. Both Salman and Sohel F Rahman had to step down from the boards of the banks as a consequence. Our attention to this company's share trading was also drawn from the past record of Beximco when it along with other companies was accused of the 1996 share scam by the Securities and Exchange Commission. The share scam case against Beximco is still in court.
About his allegation on mentioning Bextex shares as junk, we would like to point out that junk shares refer to Z-category or low-performing shares in Bangladesh. The only financial newspaper in the country, The Financial Express, also refers Z-category shares as 'junk shares'. It is also an international practice as evidenced by international rating agencies using the word "junk" to describe stocks or bonds that lose investment grade. In such ratings, the raters cite weak earnings that may lead a company to defer dividend payments on securities. In a March 5, 2009 report, Fitch Ratings cut its ratings on UBS' preferred shares into junk territory and said it may cut them further. Fitch cited increased risks in the European bank's shares.
About Salman Rahman's allegation of negatively projecting Beximco Pharmaceutical's deal with Gem Global, we reported that this Cayman Islands-registered company is of little repute and has cases against it in Hong Kong. Its sudden involvement in our capital market with hot money naturally deserves media attention, which we did with the purpose of protecting our investors and the country's economy.
Salman Rahman in his written statement made reference to Transcom Group and its owner Latifur Rahman. The public clearly knows that The Daily Star and Prothom Alo are run by professional editors and the owners have nothing to do with the content of the paper. That is why these two papers have earned the readership support that they have. The hint that our reporting could be a result of anything other than professional journalism is totally untrue.
As for Salman F Rahman's response to the Amar Desh question that The Daily Star and the Prothom Alo were the architects of the "Minus Two" theory, we categorically deny it and consider it as his desperate attempt to divert public attention from the doings of his own companies. For example, a DSE website post on July 13 mentions that the SEC has formed an enquiry team to enquire certain unusual trading of shares of Bextex Ltd on the stock exchange.
We reiterate our commitment to uphold 'public's right to know' and protect the interest of investors and that of the economy.
(Mahfuz Anam)
Editor
The Daily Star
(Abdul Quayum)
Joint Editor
on behalf of Matiur Rahman
Editor
Prothom Alo