Ex-BSEC chief Shibli Rubayat Ul Islam arrested

Shibli Rubayat Ul Islam, former chairman of the Bangladesh Securities and Exchange Commission (BSEC), has been arrested from the capital capital's Dhanmondi area

Staff Correspondent

Publisted at 8:21 AM, Wed Feb 5th, 2025

Shibli Rubayat Ul Islam, the former chairman of the Bangladesh Securities and Exchange Commission (BSEC), has been arrested in a case filed by the Anti-Corruption Commission (ACC).

Dhaka Metropolitan Police (DMP) Detective Branch (DB) Chief Rezaul Karim Mallik stated that Shibli was apprehended on the night of 4 February in the Dhanmondi area of the capital.

However, details regarding the specific charges under which he was taken into custody remain undisclosed.

His arrest follows the Ministry of Home Affairs’ cancellation of his passport on 29 January, along with those of eight other former BSEC officials.

A subsequent travel ban was also imposed, preventing them from leaving the country.

The eight individuals include former BSEC commissioner Sheikh Shamsuddin, former executive directors Mahbubul Alam, Saifur Rahman, and Rezaul Karim; former directors Sheikh Mahbub-Ur-Rahman and Mohammad Mahmudul Haque; former additional director SK Md Lutful Kabir; and former joint director Md Rashidul Alam.

Legal and Financial Restrictions

Prior to his arrest, Shibli had been facing multiple allegations of financial misconduct.

On 9 October 2024, a Dhaka court had issued a travel ban against him amid an ACC investigation into charges of amassing illegal wealth and money laundering. 

Accusations have also surfaced regarding extensive financial mismanagement and market manipulation during his tenure at BSEC.

On 10 August 2024, the Bangladesh Financial Intelligence Unit (BFIU) froze the bank accounts of Shibli, his son Zuhayer Sarar Islam, and six others linked to the stock market.

Later, on 21 August, the BSEC ordered stock exchanges and the Central Depository Bangladesh Limited to freeze shares held by 11 individuals, including Shibli and his son.

Allegations of Market Manipulation

Shibli, who had been affiliated with the pro-Awami League Blue Panel at the University of Dhaka, resigned as BSEC chairman on 10 August 2024—just five days after the fall of the Sheikh Hasina-led government in a mass uprising.

His tenure, which began in May 2020, has been marred by allegations of autocratic decision-making, facilitating market manipulators, and approving fundamentally weak companies for public listings, leading to significant financial losses for general investors.

During his tenure, over 50 underperforming companies were reportedly allowed to raise capital through initial public offerings (IPOs), despite concerns over their financial health.

Critics allege that the commission failed to take strict action against market manipulators, allowing influential investors to engage in price rigging with minimal consequences.

Regulatory Lapses and Governance Concerns

Stock exchange officials and market participants have long criticised the Shibli-led BSEC for excessive intervention, undermining the independence of the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE).

The commission is accused of restructuring corporate boards to its advantage and failing to implement crucial regulations, such as the mandatory 30% shareholding requirement for sponsor-directors of listed companies.

During the COVID-19 pandemic, BSEC introduced reforms aimed at revitalising dormant companies and reshuffling corporate governance structures.

However, these efforts were overshadowed by reports of regulatory leniency, preferential treatment for select investors, and weak enforcement against non-compliant entities.

One of the most controversial initiatives under Shibli’s leadership was the formation of the Capital Market Stabilisation Fund (CMSF), which pooled undisbursed dividends from listed companies.

However, the initiative faced resistance from the central bank, leading to non-compliance from nearly 100 companies, including banks, insurance firms, and non-bank financial institutions, which refused to deposit their dividends into the fund.

As the ACC intensifies its crackdown on financial misconduct, the arrest of Shibli Rubayat Ul Islam signals an escalating effort to hold former regulators accountable for alleged irregularities that have undermined investor confidence and market integrity.

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