The Bangladesh Securities and Exchange Commission (BSEC) has recently granted LR Global Bangladesh the right to regain management of DBH First Mutual Fund and Green Delta Mutual Fund.
However, it was on condition that the LR follow rules, bring back money invested in a news outlet, pay fines and withdraws legal measures against market intermediaries, said BSEC Chairman Prof Shibli Rubayat Ul Islam.
“As part of bringing discipline in the mutual fund sector, we are trying to reduce all the disputes in the sector,” he said.
Mutual funds are investment tools that pool a fixed amount of money for a certain period from investors and re-invest it into stocks, bonds and other assets.
On December 28, 2019, the regulator allowed IDLC Asset Management to take over management rights of the funds from the LR.
The decision was based on the demand of 73 per cent of the DBH unit holders and 70 per cent of the Green unit holders.
Islam said most of those who applied for a change of the asset manager were not holding the units now. So it is not possible to change the asset manager, he added.
The LR has been ordered to bring back money it had invested in non-listed companies recently, he said, adding that it had already paid the fines for previous breach of laws.
In 2015, the stock market regulator fined the LR Tk 50 lakh after a regulatory probe unearthed a number of gross violations of securities rules and misappropriation of hard cash of six mutual funds managed by the asset management company.
“We have been working with the honourable commission in a very constructive fashion and we will provide all necessary support and cooperation for the betterment of the capital markets. We are completely focused on improving confidence in the investment industry,” said Monowar Hossain, head of LR’s legal and compliance department.
“Once everything will be finalised we will inform accordingly.”