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Published : 13 Jan 2016, 07:44 PM
Yawer Sayeed, Managing Director and CEO of AIMS of Bangladesh, has written to the Bangladesh Securities and Exchange Commission chairman asking him to investigate the matter.
BRAC Bank has admitted that it bought issues of the fund but the amount is 'not significant'.
It also says AIMS brought the allegation because it was not happy with the bank's appeal with the Supreme Court against the BSEC decision to close the fund.
The bank, as the custodian of the fund, physically holds all assets and as such is privy -- unlike the other investors -- to all inside and sensitive information.
According to the letter Sayeed wrote, the information includes details of stock holding at any point in time, costs and sale prices as well as all purchase and sale transactions, profits, and losses.
It invested substantially in the fund on its own account as well as with subsidiaries and associates, Sayeed said in the letter.
"Unfortunately, some officials of different ranks of the bank and its subsidiaries have also invested in the fund in their personal capacity, ostensibly with the same privileged information, in complete disregard to all corporate governance norms," the letter, dated Tuesday, read.
As the custodian of the fund, Sayeed also sought cancellation of the bank's registration.
According to local and international rules, a custodian of a fund cannot take part in 'insider trading'.
BRAC Bank Head of Communications Zara Jabeen Mahbub told bdnews24.com her bank has bought 2.2 million of 89.99 million units of shares of AIMS First Guaranteed Mutual Fund.
"How can this be a substantial amount? It's only 2.44 percent," she said.
Referring to the appeal at the Supreme Court, she said, "AIMS might not have taken the issue well. That's why it has brought the allegation."
In an executive decision on Jan 24, 2010, the BSEC fixed a 10-year term for closed-end mutual funds and ordered the closure of those that crossed the timeframe.
As a result, a BSEC meeting on Jun 29 last year decided to close AIMS First and Grameen One mutual funds after Dec 31.
But Ali Zaman, one of the unit holders in both mutual funds, challenged the BSEC decision in the High Court on Sep 14.
BRAC Bank later joined petitioner Zaman's side in the petition.
The High Court declared the BSEC decision 'illegal', but the chamber judge stayed the order until Jan 10 following the regulators' appeal.
A regular bench of the Appellate Division is set to hear the case on Thursday.
