New committee established to investigate corruption and market manipulation

To stabilize Bangladesh's capital market and protect investors, the government has set up a committee to investigate past irregularities, corruption, and market manipulation, particularly during the 15-year Awami League rule. A finance ministry press release highlighted widespread corruption in the capital market, reflecting broader economic misconduct. Weak and nearly defunct companies were frequently listed, burdening the market, while unchecked manipulation inflated "junk" stock prices, hurting ordinary shareholders. Artificial interventions like floor prices and circuit breakers masked market instability, but as they are phased out, the deeper consequences of these irregularities are becoming clearer. The finance ministry noted that market manipulators siphoned off investor money, and the ongoing fallout from years of corruption can no longer be ignored.

To address these issues, the Bangladesh Securities and Exchange Commission (BSEC) has created a five-member task force to reform the capital market. The task force will focus on improving regulatory compliance, governance, technology modernization, and product development, while also working to enhance investor education and broaden investment opportunities. BSEC is also pursuing broader reforms, consulting with market stakeholders to shape future market development.

In collaboration with the World Bank, BSEC is enhancing its surveillance systems to detect and prevent market manipulation. Additionally, regular meetings with key industrial groups aim to boost the supply of fundamentally strong shares. Key reform areas include simplifying IPO approvals, expediting company listings, and facilitating long-term financing through the market. The government is also revising the Public Issue Rules 2015 to ensure fair valuations for listed companies, hoping to attract well-established and multinational firms to boost investor confidence.

State-owned enterprises (SOEs) are also being encouraged to list on the stock exchange, which the finance ministry believes will not only deepen the capital market but also strengthen these institutions. The ministry emphasized that corporate governance will be mandatory for all listed companies, ensuring transparency through regular disclosures.

The government is optimistic that these reforms will quickly benefit investors, especially those affected by recent market downturns and scandals, by restoring trust and fostering a healthier capital market environment.