The probe report on the recent share market debacle was 'generally based on perception', the stockmarket regulator said.
The probe report on the recent share market debacle was 'generally based on perception', the stockmarket regulator said.
The
Securities and Exchange Commission (SEC) said it would not be easy to
take legal action against anyone based on the report. The SEC made the
comments after the finance minister sought its reactions to the probe
report.
Finance Minister AMA Muhith yesterday said the decision
on releasing the probe report will be taken after considering the views
of the Bangladesh Bank (BB) and the SEC.
"We sought opinions from
agencies concerned such as the BB and SEC. We will take decisions based
on their opinions," the minister said after a meeting of the cabinet
purchase committee.
However, he did not make any comments on the
SEC reply, which was sent to the finance ministry last week. The
ministry is yet to get the BB reactions.
The SEC said the probe
committee has accused it in a bigger way. “But the committee never took
any explanation from the SEC,” according to the eight-page statement, a
copy of which was obtained by The Daily Star.
The probe body was
mostly critical of the capital issue department of the SEC. Although it
suggested taking actions against the executive director of a related
department and the commission's chairman, nothing was told about the
member of the department concerned. “Usually, no issue is considered in
the commission or approved without permission of the related
department's member,” the SEC said.
On the probe committee's
recommendation on the rights issue that the rights issue proposals
should not be made public until the SEC approval, the SEC said it
appears that the probe body has made such advice as it "lacked basic
understanding".
“If it is not made public on the day the
company's board of directors approves the rights issue proposal, an
opportunity will be created for insider trading."
It said a
specific allegation was raised against only one SEC official, but the
entire organisation was largely charged for corruption because of one
person. “It's cruel,” the regulator said.
The probe committee
compared the recent debacle with the 1996 share scam, and said this
year's crash cannot be compared to 1996, as the primary market is the
main reason this time.
But SEC said: “Actually, the price inflation in the secondary market left an impact on the primary market."
The
SEC also refuted the report's findings that the market crash could be
averted if the SEC did not fail to check pre-IPO price manipulation.
The
SEC said: "The price inflation in the secondary market would be more if
liquidity entered the secondary market from the primary market.”
The
report ignored the banks' role in increasing liquidity in the market
and different steps taken by the BB in November 2010, and its
subsequent impact on the market, the SEC claimed.
“The SEC has
been conducting all its activities in line with laws. The probe report
could not cite a single example that it (the SEC) had taken any
decision in violation of the law,” the SEC said.
