A state-appointed committee probing a recent series of sharp falls in Bangladesh share prices handed its report to the finance minister on Thursday, holding the regulator primarily responsible for the debacle. "Many are to blame share issuers, issue managers, brokers, dealers and businessmen for the debacle," Committee Chairman Khandaker Ibrahim Khaled, a former deputy governor of the central bank, told Reuters.
"But the freefall could be avoided if the stock market regulator acted professionally," he said. A series of market crashes in January triggered violent protests by mostly small investors, many of whom said the losses they sustained had turned them into paupers.
The protests that led to street battles with police halted trading at the country's Dhaka and Chittagong stock exchanges for several days. The government later ordered the probe. Khaled said the committee had asked for a comprehensive restructuring of the Securities and Exchange Commission (SEC), the stock market regulator, to safeguard the interests of small investors in future.
He submitted a 300-page report to Finance Minister Abul Maal Abdul Muhith. The committee found many irregularities, such as that "two investors opened several accounts (each) and transacted 25 percent of their total trade between themselves, impacting share prices on the market." Share prices had doubled in only six days before crashing. Khaled, also a noted economist, said unnamed businessmen might have taken illegal advantage of people in power through relations with them. He said up to 50 billion taka ($687 million) might have been laundered out of the country during the share scam.