The Dhaka Stock Exchange has requested a temporary suspension to large-scale procurement activities by the Central Counterparty Bangladesh Limited on allegations of irregularities, a lack of transparency and a delay in operation commencement.
DSE chairman Mominul Islam sent a letter to CCBL chairman Md Wahid-Uz Zaman on December 10, detailing the concerns about these issues.
The CCBL was incorporated in May 2018. However, the institution is yet to be operational.
The objective of establishing CCBL was to make capital market more efficient by providing all participants with quicker and more effective means of exchanging information.
The Dhaka bourse is a major shareholder of the CCBL.
The DSE鈥檚 board of directors and the DSE Brokers Association of Bangladesh at a meeting on December 3 raised serious allegations about procurement practices and other activities of the CCBL in the past years and sought DSE鈥檚 immediate intervention in the matters for a fair review of the past decisions pending which all procurement processes at the CCBL to be kept suspended.
Following the allegations, the DSE in the letter asked the CCBL to suspend all procurements exceeding Tk聽1 crore for six months to allow minimum time to determine the best course of action for the CCBL.
鈥楢s such we request you to urgently arrange a meeting between the directors of the CCBL and the DSE to review the situation at the policy level followed by formation of a joint commission at the operational level,鈥� the letter said.
Farhad Ahmed, managing director and chief executive officer of the CCBL, denied commenting on the allegations.
鈥榃e will give an official answer to the DSE about the concerns mentioned in the letter which was addressed to the chairman of CCBL,鈥� he said.
The letter alleged several key issues, including procurement decisions in the past years saying it might have exposed critical technology infrastructure to risks, and significant delays in starting its operations, raising doubts about its efficiency and transparency.
鈥楾he settlement facility in the capital market currently being provided largely by the DSE, there could have been significant leveraging opportunity by sharing common infrastructural facilities between the DSE and the CCBL. However, there had not been any effective dialogue between the two institutions so far. It appears that such leveraging opportunity has been purposefully avoided in favour of inflated and unnecessary procurements, leading to higher cost of service to be rendered,鈥� the DSE letter said.
According to the letter, there is a lack of communication between the CCBL and key stakeholders.
鈥業t could lead to delays or failure in project implementation. Also, irregular sharing of financial statements by the CCBL raises concerns about its governance standards,鈥� the letter stated.