97% of Investors Affected by Five Brokerage Firms to Receive Compensation

DHAKA:

Nearly 97% of investors affected by alleged fund embezzlement at five Bangladeshi brokerage firms will receive compensation, with the Dhaka Stock Exchange (DSE) set to distribute about Tk 720 million among 17,332 investors.

The compensation payments will begin on Sept. 28 and are expected to be completed within two months, officials said Tuesday.

The announcement was made at a press conference organised by the DSE at its headquarters in Nikunja, Dhaka. DSE Chairman Mominul Islam, Managing Director Nuzhat Anwar and Investor Protection Fund (ITF) Chairman Nasrin Begum attended the briefing.

Compensation capped at Tk 500,000 per investor

Under the DSE Investor Protection Fund Rules, eligible investors can receive compensation of up to Tk 500,000 each, Nasrin Begum said.

She said the claims had been assessed through a verification process before the list of eligible investors was finalised.

The initiative is intended not only to return funds to affected investors but also to help rebuild confidence in Bangladesh’s capital market, she said.

“Protecting investors’ interests also protects the interests of the capital market,” Begum said.

Tk 376 million already returned

DSE Chairman Mominul Islam said about Tk 376 million had already been returned to investors affected by the five brokerage firms. A further Tk 720 million will now be disbursed from the Investor Protection Fund.

The latest payments are expected to enable 17,332 investors to recover the full amount they are eligible to receive, according to the DSE.

Islam said legal action was also being pursued against the five brokerage firms accused of misappropriating investors’ funds. Authorities would seek to recover money through the firms’ assets, including shares held by them at the DSE and other identifiable personal or corporate assets, he said.

The DSE will also consider using future contributions to the Investor Protection Fund to provide additional compensation to affected investors, Islam added.

Alleged misuse of investors’ shares

The five firms — Mashiur, Banco, Tamha, Crest and Shah Mohammad Sagir Securities — have been accused of selling investors’ shares and misappropriating the proceeds. The incidents reportedly occurred in 2022 or earlier.

The firms are alleged to have misappropriated around Tk 5.5 billion belonging to ordinary investors.

Another brokerage firm, Salta Securities, has also faced allegations of misappropriating investors’ funds. An investigation by the Bangladesh Securities and Exchange Commission (BSEC) is still underway, and the DSE did not provide an estimate of the amount allegedly involved.

Stronger monitoring planned

Islam described the compensation effort as both a legal and humanitarian matter, saying affected investors had endured financial and psychological distress after being unable to recover their money.

The DSE is strengthening its monitoring and surveillance mechanisms to reduce the risk of similar incidents in the future, he said.

The compensation programme is expected to provide relief to a large majority of investors affected by the five firms. The recovery of funds from the firms accused of wrongdoing, along with stronger oversight of brokerage operations, will remain key issues as regulators seek to strengthen investor protection and confidence in Bangladesh’s capital market.