BSEC fines former IFIC MD Sarwar Tk 50 million over ‘bond fraud’

Investigation finds bond promoted as “IFIC Amar Bond” was actually issued by a real estate firm

The Bangladesh Securities and Exchange Commission (BSEC) has fined former IFIC Bank managing director Shah Alam Sarwar Tk 50 million after confirming “fraudulent practices” in the promotion of the “IFIC Amar Bond”.

Although the bond was issued under the name of a housing company, Shreepur Township Limited, it was promoted publicly as the “IFIC Amar Bond”.

Investors were “misled” to believe that IFIC Bank had issued the bond directly, while the bank was only a guarantor.

BSEC’s 980th commission meeting on Tuesday reached the decision, chaired by Khondoker Rashed Maqsood.

The real estate company had raised around Tk 10 billion by selling the bond in 2023, despite having no prior experience in constructing flats or plots.

Media advertisements highlighted IFIC Bank’s name in large fonts, while Shreepur Township Limited appeared in smaller letters, misleading investors into believing the bank had issued the bond.

BSEC investigation found that the bond issue violated securities laws and regulations, deceiving investors about the issuer.

“IFIC Bank did not issue the bond. Shreepur Township Limited collected funds using the bank’s name,” BSEC said.

Earlier, BSEC banned former chairman Shibli Rubiayat-Ul Islam and IFIC shareholder Salman F Rahman for life for fraud in the same bond issue.

Salman’s son Ahmed Shayan Fazlur Rahman was also banned for life.

Former BSEC commissioner and Dhaka University professor Shaikh Samsuddin Ahmed and former CEO of IFIC Investment Imran Ahmed received five-year bans.

The market regulator also imposed financial penalties: Salman was fined Tk 1 billion, Shayan Tk 500 million, and credit rating agency Emerging Credit Rating Tk 1 million.