Phoenix Finance 1st Mutual Fund traded at a 54.75 per cent discount to its net asset value (NAV) at fair value, prompting its auditor to flag a regulatory compliance lapse after the trustee failed to call a required unitholders’ meeting.
Auditor Harun Mahmud FCA, partner at M.J. Abedin & Co., Chartered Accountants, raised the issue in his qualified opinion on the fund’s financial statements for the year ended 30 June 2026.
According to the auditor’s report, the fund’s six-month average trading price was Tk4.00, which was 54.75 per cent below its NAV at fair value.
The discount exceeded the 25 per cent threshold set under Clause 24(15)(e) of the BSEC Mutual Fund Rules 2025, which requires trustees to call a meeting of unitholders when a fund’s six-month average market price falls below the prescribed level.
The auditor noted that the trustee had not called the required meeting of the fund’s unitholders despite the breach of the threshold.
The audit report also highlighted the fund’s treatment of dividend income from investments in securities.
According to Note 3.05(b) of the financial statements, the fund recognises dividend income on an accrual basis, recording dividends immediately after the record date in line with industry practice.
However, the note also states that under IFRS 9, Financial Instruments, dividend income should be recognised when the shareholder’s right to receive the payment is established.
The auditor included the matter under an “Emphasis of Matter” section, drawing attention to the disclosure without modifying the qualified opinion.
