Chowdhury Nafeez Sarafat, chairman of RACE Asset Management, has manipulated the stock prices of many companies for financial gain and caused losses of crores of taka to general shareholders, found a primary investigation of the Criminal Investigation Department (CID).
An investigation has already started and a case will be filed under the money laundering act soon, said Kusum Dewan, deputy inspector general (organised crime) of the CID.
A nexus led by Sarafat, also the former chairman of Padma Bank, his wife, Anjuman Ara Shahid, and Hasan Taher Imam, managing director of RACE, were involved in the organised financial crimes, which also include money laundering, fraud, forgery and over-invoicing.
In 2008, Sarafat and Imam took the licence for RACE Management PCL in 2008. The asset management company had created quite a stir among the capital market stakeholders through various workshops at that time.
By 2013, RACE was managing 10 mutual funds.
Sarafat, who is the younger brother of sports commentator Chowdhury Jafarullah Sarafat, Shahid and Taher Imam invested the money from the fund and bought shares of the then Farmers Bank (now Padma Bank) and became directors of the bank’s board, according to the CID findings.
However, the mutual funds did not benefit from this investment in the bank.
“The combined size of the funds is about Tk 4,500 crore. The FDRs [fixed deposit receipts] are opened for a fixed period with the money of the fund, but those were broken before their expiry in collusion with the bank officials,” according to the CID report.
As a result, investors in the fund are being deprived of profits worth taka crores.
Around Tk 650 to 700 crore of the fund was deposited in short-term deposit (STD) and special notice deposit (SND) accounts at only 3-4 percent interest.
And again, about 2-3 percent of the interest money was embezzled in collusion with bank officials, the report reads.
Although there are rules for distributing at least 75 percent of the profits received from the stock market to the investors, in most cases, RACE embezzled most of the funds by not following this rule.
Sarafat, also the chairman of the board of trustees of the Canadian University of Bangladesh (CUB), extended the tenure of the mutual fund by 10 years in collusion with the Bangladesh Securities And Exchange Commission and Investment Corporation of Bangladesh without returning the entire money to the investors in the fund.
On December 2, 2018, RAJUK allotted a plot of 171.16 katha to CUB under the Purbachal New Town Project. The government suffered a loss of Tk 77 crore, said CID officials.
Besides owning the mutual funds, Sarafat is the chairman of Argus Credit Rating Services.
“We have already started collecting databases regarding the anomalies of Nafeez Sarafat and his family members and associates,” said Md Moniruzzaman, inspector of the CID’s financial crime unit.
