The Bangladesh stock market has been thrown into disarray due to alleged unethical interference by Khondoker Rashed Maqsood, the Chairman of the Bangladesh Securities and Exchange Commission (BSEC). In light of this, investors have begun demanding the resignation of the BSEC chairman.

Following the political shift in August, major changes were made in the leadership of the country’s capital market to restore investor confidence and reform the stock exchange. However, these efforts have not borne fruit, and the market remains unstable. Many market insiders blame the situation on the chairman’s repeated decision changes, poor judgment, and unethical interference. Concerns have also been raised about his lack of prior experience in capital markets. Multiple sources indicate that in his previous roles as CEO of various banks, Khondoker Rashed Maqsood had to step down before his contract term ended, raising further questions about his qualifications.

According to sources, since taking office, Chairman Maksud has made several controversial decisions. Notably, he has changed his stance multiple times regarding the appointment of an independent director at the Dhaka Stock Exchange (DSE). Additionally, there are allegations that he forced the experienced commissioner, A.T.M. Tariquzzaman, to resign by stripping him of his responsibilities. Furthermore, the chairman is accused of unfairly sidelining BSEC Executive Director Saifur Rahman without investigation, effectively making him an Officer on Special Duty (OSD). These actions have created new challenges for the stock market, triggering resentment among BSEC officials.

The chairman’s controversial decisions extend to launching new investigations into several companies, further exacerbating investor anxiety. As part of his latest move, BSEC instructed today that 27 companies be downgraded to the ‘Z’ category, a step which has only heightened market instability, according to market observers.

DSE sources report that the regulatory body recently directed the exchange to take action against 27 companies that have irregularities such as failing to hold Annual General Meetings (AGMs), non-payment of dividends, or halting production. However, the DSE itself has been facing operational difficulties, with key positions like the Managing Director (MD), Chief Technology Officer (CTO), and Chief Operating Officer (COO) remaining vacant for an extended period. The exchange is currently being run by an Acting MD. These vacancies have disrupted DSE’s operations, and the chairman’s involvement in such controversies has only fueled more criticism from the investor community, who now question his competence and are calling for his resignation.

When asked about the downgrading of the 27 companies to the ‘Z’ category, DSE’s Head of Public Relations and Deputy General Manager, Shafiqul Rahman, told Arthosangbad, “I don’t have much information on this, so I’m not in a position to comment.”

A former director of the Dhaka Stock Exchange (DSE) expressed deep frustration with the recent actions of the Bangladesh Securities and Exchange Commission (BSEC), particularly regarding its chairman’s decisions. In an interview with Arthosangbad, the former director stated, “There seems to be no end to our sorrow; we have no one to turn to with our grievances. The new BSEC decisions are disorganized, leading to a loss of investor confidence.” He added that, as veteran stock brokers, they believe some of the recent short-term decisions made by the commission were intended to restore market confidence. However, the lack of coordination and failure to unite all market stakeholders has exacerbated the situation.

The former director also compared the leadership of Bangladesh Bank’s new governor, Ahsan H. Mansur, who managed to restore a certain level of confidence in the fragile banking sector, with the contrasting performance of Khondoker Rashed Maqsood, the BSEC chairman. He noted that the delay in forming the DSE board of directors and the chairman’s involvement in controversial activities have unsettled DSE’s 240 members and new stakeholders, contributing to the stock market’s uncertainty.

DSE Brokers Call for Unified Approach

When asked for his opinion, Saiful Islam, President of the Dhaka Stock Exchange Brokers Association of Bangladesh (DBA), said everyone should focus on whether investor confidence is truly being restored. “We all need to ask ourselves if we are bringing back investors. The SEC, brokerage houses, the stock exchange, and intermediaries—all are stakeholders and must consider this carefully,” he said. Saiful also emphasized the importance of appointing a complete board of directors for DSE, noting that the exchange has been operating without a full board for over a month and a half.

Concerns About BSEC Leadership and Decisions

Sources suggest that after the interim government took office, the BSEC was reorganized to reform the capital market and restore investor confidence. However, none of the new commission’s decisions have yielded positive results, and many have sparked controversy. These questionable decisions have created instability in the stock market, and doubts have arisen regarding the competence of the newly appointed BSEC officials. Instead of restoring trust, internal conflicts have emerged between the BSEC and market intermediaries.

According to reports, the previous BSEC commission, which included qualified and experienced commissioners such as A.T.M. Tariquzzaman and Mohammad Mohsin Chowdhury, was reorganized. Of the five-member team, only A.T.M. Tariquzzaman had 25 years of direct experience in the capital market. However, on September 11, the Financial Institutions Division of the Ministry of Finance issued an order removing Tariquzzaman from his post, effective until December 10. Just four days later, on September 15, BSEC Chairman Khondoker Rashed Maqsood removed Tariquzzaman from his duties, and under pressure, Tariquzzaman was forced to resign on September 17. Additionally, the executive director, Saifur Rahman, was sidelined as an Officer on Special Duty (OSD), further aggravating tensions within BSEC. This led to a growing internal conflict between BSEC officials and Chairman Maksud.

Repeated Decision Changes Fuel Criticism

Since the new commission took office, one and a half months have passed, yet the appointment of an independent director to the DSE has already seen three decision changes, all of which were flawed, violating existing laws. The situation has drawn widespread criticism, and market insiders believe the lack of understanding among the BSEC chairman and commission members is forcing repeated decision changes. This has highlighted the commission’s inefficiency, and economists warn that repeating the same mistakes is unacceptable. Such actions are causing investors to lose faith in the country’s stock market.

Several CEOs of prominent merchant banks and brokerage houses, speaking anonymously to Arthosangbad, voiced their dissatisfaction with the Bangladesh Securities and Exchange Commission (BSEC) under the interim government. They expressed disappointment over the lack of meaningful reforms in the capital market, stating that the appointment of experienced and qualified policymakers was essential. However, they criticized the current policymakers in the commission, accusing them of arrogance and reluctance to consult with market stakeholders. Additionally, they highlighted a conspiracy to marginalize one of the few competent commissioners and executive directors, leading to their skepticism about the current commission’s ability to bring about positive change.

During a press conference held on Sunday, September 22, following a meeting with World Bank representatives, BSEC Chairman Khondoker Rashed Maqsood was questioned about Tariquzzaman’s resignation. In response, he shifted the blame to the Ministry of Finance, stating that certain tasks had to be coordinated with the ministry, and declined to comment further. When asked about the repeated errors in appointing independent directors to the DSE board and the growing conflict with market intermediaries, Maksud left without answering.

Long-Standing Criticism of the Capital Market

Criticism of the country’s capital market has been ongoing for years. Over the last 15 years, the sector became infamous for widespread plundering. Following the political shift on August 5, the government initiated reforms in this sector. The BSEC was reorganized by dismissing three of the previous four commissioners, with Khondoker Rashed Maqsood appointed as the new chairman. The other commissioners included Md. Ali Akbar and Farzana Lalarukh, with Mohammad Mohsin Chowdhury retained from the previous commission. Upon assuming office, the new commission verbally dissolved the boards of directors for both stock exchanges, sparking debates and exposing the commission’s weaknesses and inefficiencies.

On September 1, BSEC appointed seven independent directors to the DSE board, which led to accusations of legal violations. The controversy intensified when two of the appointees voluntarily withdrew. On September 18, two new directors, A.F. Nesaruddin, Senior Partner at Huda Vasi Chowdhury & Co., and Syeda Jakerin Bakht Nasir, CEO of ZN Consultants, were appointed in their place. However, these appointments also violated legal provisions. Both directors ultimately refused to join due to the legal controversy. Subsequently, Mominul Islam, former managing director of IPDC, and Shahnaz Sultan, former country manager of Wells Fargo Bank, were appointed. Yet, this decision also breached the Stock Demutualization Act of 2013, which prohibits individuals from serving as independent directors if they held directorship positions in listed companies within the last three years. Mominul Islam was still managing IPDC, a listed company, just one year ago.

Additionally, according to the law, anyone who has had direct or indirect business relations with the stock exchange in the last three years or has received compensation from the exchange during that period is also disqualified from being an independent director. The previous appointees had refused their positions based on these legal criteria. The demutualization law mandates that the DSE board consist of 13 members, including six independent directors, one army-nominated director, four representatives from the stakeholders, one representative of the strategic investors, and the DSE managing director. The controversy surrounding the appointment of independent directors continues to raise concerns.

Experts Call for Strategic Decisions

When asked for his opinion, capital market analyst and Associate Professor at Dhaka University, Md. Al-Amin, told Arthosangbad that reforming the market requires time. He acknowledged the unfairness and irregularities exposed by the anti-discrimination student movement but emphasized the sensitivity of the capital market. Referring to the four changes in decisions regarding the DSE board, Al-Amin stressed the need for foresighted decision-making. He suggested that well-considered actions could have prevented the panic currently gripping general investors.

Investor Confidence at Risk

Mizanur Rashid Chowdhury, President of the Bangladesh Capital Market Investors Unity Council, stated that the BSEC should have consulted with stakeholders before making key decisions. However, he remains optimistic that certain measures could still alleviate the crisis in the capital market. Chowdhury urged the BSEC to take strict action against listed companies whose share prices are below the issue price, as no provision of the Companies Act allows for a “no dividend” policy. He emphasized the need to deviate from this approach to revive market momentum, warning that investors would naturally lose confidence if they didn’t receive returns. Chowdhury concluded that with effective steps, it is possible to bring stability back to the market.