The Bangladesh Securities and Exchange Commission (BSEC) is examining allegations that former Insurance Development and Regulatory Authority (IDRA) chairman M Mosharraf Hossain engaged in insider trading and stock market manipulation.
The enquiry is assessing whether confidential regulatory information during Mosharraf’s tenure at the insurance regulator—specifically decisions connected to Delta Life Insurance, Padma Islami Life Insurance, Provati Insurance Company, Asia Insurance and Eastern Insurance—was exploited for stock trading. It will also review whether trustee-controlled provident funds or other institutional funds were used to carry out trades based on privileged information.
BSEC in September appointed Deputy Director Mawdud Momen, Assistant Director Md Mehedi Hasan Rony and Assistant Director Navid Hasan Khan to conduct the enquiry. Their report is expected within the next two weeks, regulatory sources said.
The regulator is also looking into allegations that Mosharraf and his wife Jannatul Mawa invested Tk 33 crore from provident funds under their private companies in the stock market for personal business purposes.
Documents obtained by Times of Bangladesh show that Mosharraf opened two companies—Loves and Live Organic Limited and Gulshan Valley Agro Industries—while serving at IDRA. He served as managing director of both entities, while his wife was listed as a director.
Four separate funds were created under the names of these companies and four beneficiary owner accounts were opened to trade.
Mosharraf became chairman of the trustee boards of the four funds after joining IDRA, and Tk 32.91 crore from the provident funds was channelled into shares of the five listed companies. Officials said questions were raised about the source of the funds deposited in provident accounts linked to companies that exist largely on paper, noting that provident funds are permitted to invest only up to 25% of their total assets.
Asked about the investments, Mosharraf told Times, “Tk 33 crore is a lot, even half of that was not invested.” He claimed the market then had many initial public offerings (IPOs) and the same money appeared across applications as revolving funds, adding that the investments were made before he joined IDRA.
He said initiatives had been taken at the time to boost investment in the capital market. “I became extremely busy after taking over as IDRA chairman. My representative might have mistakenly bought Delta Life Insurance shares,” he said.
He did not comment on shares of the other four companies, however.
He said he had already provided information on these matters to several inquiries.
Asked about the probe, BSEC spokesperson and Director Abul Kalam told Times, “The Commission decided to conduct this investigation to promote fair play in the stock market. If the allegations are proven, the Commission will take action in accordance with the law.”
Separately, on 18 November, the Anti-Corruption Commission (ACC) filed two cases against Mosharraf and his wife over allegations of illegally acquiring Tk 14.5 crore.
Mosharraf, a chartered accountant with more than two decades of experience in the insurance and investment sectors, joined IDRA as a member in 2018 and was promoted to chairman in 2020. He resigned from the post in June 2022 after the ACC sought wealth statements from him and his family members.
Earlier, the Bangladesh Financial Intelligence Unit (BFIU) informed the ACC that around Tk 42 crore had been deposited in bank accounts belonging to Mosharraf, his family members and associated firms in recent years.
