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১৫ই ফেব্রুয়ারি, ২০২৫ খ্রিস্টাব্দ
রাত ২:২১
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প্রকাশিত : ডিসেম্বর ২১, ২০২৪

Assets under management of RACE intact, no gaps: Says two independent custodians

Staff Reporter: The assets under management of RACE, one of the country's largest mutual fund company, are intact and have no gaps.

On Thursday, it has been found in the reports submitted to the Bangladesh Securities Exchange Commission (BSEC) of two independent custodians of the mutual funds, the Investment Corporation of Bangladesh (ICB) from the government sector and Brac Bank from the private sector.

In its report, ICB the trustee and custodian of 6 RACE-managed funds, including EBL1STMF, TBL1STMF, 1STJANATAMF, IFIC1STMF, FIRST BANGLADESH FIXED INCOME FUND, and EXIM1STMF says for the year 2024 it found Tk 1405.98 crore out of Tk 1,513.23 crore, or 100% of capital market investments of RACE-managed mutual funds it monitors.

Similarly, BRAC Bank found Tk 831.82 crore out of Tk 880.97 crore, or 100% of capital market investments of 4 RACE-managed mutual funds 1STPOPulalifeMF, PHP1STMF, ABBANK 1ST, and 1STEBLNRBMF.

When approached to explain what these reports mean for the mutual fund industry, Professor Mazharul Islam, advisor of the Association of Asset Management Companies (AAMCMF), the trade body for the mutual fund industry, said, "This is good news for the mutual fund industry." He also added, "The three pillars of RACE’s mutual fund are its asset management company, trustee (ICB), and custodian (BRAC) have all done their job in keeping the assets of the 10 largest funds in the market safe. This should give the investors and regulator confidence."

An industry veteran and current managing director of another AMC shared his views: "In a meeting this year with AMCs, trustees, custodians, and auditors, BSEC and the Finance Ministry, a high-ranking BSEC officer said to all present that: "From the regulator’s view, if the assets of a mutual fund are intact and as reported, that is the strongest indicator that the fund manager did not engage in illegal activities. It is the mark of 99.99% good health. The one or two asset managers who have misused funds did not pass this asset test. If we find all the assets intact, we should not unduly interfere in the management of the funds." The industry veteran added, "…then by BSEC's own measure, these RACE-managed funds pass the 99.99% health mark." So why all the negative commotion about the industry, he asked, which is hampering all business? Media must also play a positive role here and not ignore reporting on the big positives and just focus on small negatives that exist in all industries.

An industry in crisis. The most damaging of which was the long price floor imposed by BSEC under then chairman Shibi Rubayat, who is currently under the scanner of the anti-corruption commission and also under indictment by the courts. The industry insider stated that over 70% of assets under the industry are facing continuous inspection inquiry enforcement. And the fund managers have little time to focus on the fund management or raising new assets.

Mr. Ahsan Habib, a frustrated investor of mutual funds, said, "At least I used to get good dividends from the mutual funds I invested in. We market is gotten worse under the new government too. There is too much interference in business, and regulators should let the managers do their jobs so they can focus on making profits and give us dividends."

The Head of Compliance and DMD of RACE, Mr. Mamunur Rashid, said over the phone: "The full investment assets 2237.81 crore in our mutual funds are held by custodians ICB and BRAC Bank and are frequently scrutinized by fund trustees and regularly reported to BSEC affirming RACE’s commitment to transparency and compliance. So there has been no unlawful diversion of assets under our management. Since inception, Race funds have returned over taka 1800 crore to investors, and in the last three years alone, over taka 600 crore in cash dividends were paid to investors.

Earlier in media reports, RACE senior employees in a press release have claimed that a certain vested quarter has been exploiting misperception and information gaps to spread false and malicious rumors to extort management and engineer a takeover of the company from its founder. "Such targeted misinformation is hurting our hard-earned reputation over the last 15 years and also damaging confidence in the mutual fund industry. That is why we are speaking out," the press release had said.

Weaponizing inspection inquiry for corporate takeovers? In documents obtained by this reporter, a now-retired BSEC high-up documented in his comments that during the regime of Shibli Rubayat there was a 3-year-long review of the mutual funds of the three largest asset managers, ICB, RACE, and LR GLOBAL. While not much has been made public about ongoing inspections of the other two asset managers, no evidence of asset defalcation was found in RACE-managed funds, while its asset quality and operating efficiency were found to be highest among 26 asset managers. Yet the continuous scrutiny on RACE was puzzling, which seemed motivated by other than regulatory purpose, he stated.

Eventually, the spat between BSEC officers led by Shibli Rubaiyat and RACE, led by its founder and managing director, became quite public.

Ultimately, RACE resorted to the courts, filing complaints against Shibli Rubayat, his cohorts, and a RACE insider, with the claim that this group had conspired a takeover of RACE and its mutual funds through these arbitrary and malafide actions.

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