AS companies with flawed financial statements continue to hit the stock market dodging the capital market regulator, when the market is showing the sign of becoming vibrant, it raises concern among the stakeholders whether the Bangladesh Securities and Exchange Commission (BSEC) has the proper capacity to rightly process the IPO applications. Auditors and issue managers are often responsible for accounting-related flaws in IPO prospectuses. Thus questions may also arise whether the honesty and integrity of the business firms; which prepare the company’s prospectus and present it to the BSEC. It is the custodian of the bourse and the Commission should therefore take tough action against audit firms if they are found to be involved in preparing financial reports with flawed information. Such firms must be blacklisted to prevent such act again. BSEC officials claim they always put their highest effort in scrutinizing IPO prospectus of the companies before issuing its consent is also party correct. For instance, they postponed the IPO subscription of a company on August 23 just one day before opening it for investors as they came to know of some specific wrong information present in its prospectus. Earlier, such misleading financial reports were also identified in the IPO prospectus of several other companies and were held up for right information. But it is also true that many others were able to avoid the BSEC’s vigilance in which many had their hands and investors were later victims of price manipulationsBSEC holds the trust of the millions of small investors who provide capital in the bourse to make it the hub of the country’s secondary capital mobilization for companies to grow and the economy to prosper. Investors put their trust in the regulator while making billions of taka investment in the stocks. Surely it is not too much to ask of the regulatory agency to be honest and ensure that it follows the strictest guidelines when it vets firms to issue IPOs to subscribe to realize working capital for their expansion.If such guidelines were not followed, we would risk ending up with infected bourses in which investors may see their money swindled through over pricing and other manipulations. Any economy with an ailing bourse is indicative of deeper socio-economic problems and destroying the capital market itself. Both local and foreign funds will not fail to come in this situation; whatever is there may also quickly disappear. This is a highly sensitive place and the BSEC is the only authority; which can protect investors, although it failed at least twice in last 15 years when many of its functionaries were involved in the manipulative trading to personally gain from it.There is no alternative to highest vigilance and professional integrity while giving approval to new IPOs and watch them that nobody is manipulating the trading in the floor.
