Chaos at BSEC intended to obstruct corruption investigation

BSEC Chaos Aimed at Shielding Stock Market Manipulators: Initial Findings

• The turmoil at the Bangladesh Securities and Exchange Commission (BSEC) in early March was allegedly orchestrated to protect individuals exposed in an ongoing corruption investigation, according to the commission's preliminary findings.

• The protests, described as "chaos" by the BSEC, disrupted regulatory operations for two days, creating a direct confrontation between the top leadership and employees.

• Demonstrating officials demanded the resignation of the BSEC leadership, while the chairman and three commissioners reaffirmed their commitment to anti-corruption measures.

Findings Sent to Finance Ministry, Calls for Interministerial Probe

• The BSEC submitted its initial report to the Financial Institutions Division (FID) of the Ministry of Finance last week, recommending an interministerial investigation.

• On March 5, protesting officials confined the chairman and commissioners in a meeting room, demanding the reinstatement of an official dismissed over corruption charges.

• In a letter, the BSEC stated that a group of employees stormed the meeting room in an act "completely contrary to professional conduct."

• Protesters allegedly shut down power and CCTV cameras, held officials hostage for nearly four hours, used abusive language, and even threw an AC remote at them.

• The findings also accuse demonstrators of physically assaulting the chairman’s private secretary and vandalizing offices at the BSEC building in Dhaka.

Security Forces Intervene Amid Escalating Tensions

• As the situation deteriorated, security personnel, supported by the Bangladesh Army, intervened to rescue the top leadership.

• The authorities used batons to disperse the demonstrators before escorting senior officials out of the premises.

• The report suggests that the protests were an attempt to shield those implicated in stock market manipulation and prevent accountability.

Background: Anti-Corruption Actions Trigger Protests

• The unrest stemmed from an investigation committee formed by the BSEC to probe irregularities from the previous government.

• Several reports identified individuals and institutions involved in stock market fraud, including former BSEC officials.

• In response, the BSEC issued show-cause notices and dismissed former executive director Saifur Rahman over serious irregularities.

• Protesters allegedly exerted pressure to reverse this decision and sought to annul the show-cause notices.

Legal Actions and Recommended Reforms

• On March 6, the BSEC chairman’s security staff filed a police complaint against officials involved in the vandalism.

• By March 9, signs of stability returned to the stock market.

• The BSEC proposed a high-level investigative committee, including representatives from the Ministry of Public Administration, Home Affairs, Law, and Finance.

• Given its classification as Critical Information Infrastructure (CII), the commission plans to deploy armed security personnel at its premises.

• Structural reforms, recruitment of skilled government officials, and security measures for the chairman and commissioners have also been recommended.

Training and Professionalism Measures

• The BSEC emphasized the need for employee training to promote professionalism and prevent future disruptions.

• It also requested an FID investigation into protests against the appointment of Chairman M Mashrur Riaz.

These findings highlight concerns over internal resistance to anti-corruption efforts within the stock market regulator and underscore the need for strict legal and structural reforms.