Energy & Power

INVESTIGATION

DESCO Share Scamy

Former Secretary ANH Akhter Hossain and 60 other officials and employees of the Power Division have allegedly taken about 50,000 shares of Dhaka Electric Supply Company Limited (DESCO) of which present value is nearly Tk 27,500,000. Sources at the Power Division informed that the shares were distributed among the officials and employees of the division last month. The face value of per share is Tk 100.

Mansur Alam, Executive Director of the Securities and Exchange Commission (SEC) said the shares of a company registered in the stock market cannot be handed over in this manner. If an allegation is lodged, the SEC would investigate the matter, he said.

Economist Abu Ahmed, an expert on the capital market, said that capturing shares in this way is illegal.

The DESCO, a company under the Power Division, floated 25 percent shares of total capital in the market last year. According to the DESCO website, the company following a government decision, allotted 10 percent of the 25 percent offloaded shares for the company’s officials and employees. The rule was similar to that of private companies. But, exploiting his influence ANH Akhter Hossain allotted 50,000 shares out of that 10 percent to the employees of the ministry.

According to the sources, Akhter himself took at least 4,000 shares of which the face value was about Tk 400,000 and now the market price is about Tk 200,000-250,000. The Joint Secretaries each got 3,000 shares while Deputy Secretary 1,800, Senior Assistant Secretaries 1,600, Administrative Officers 800 and some employees 400 each. Officials at the Power Division admitted that they got the shares. The market price of per share is Tk 550.

Nurul Huda, Secretary of the DESCO acknowledged that employees of the ministry have received the shares. But he would not disclose the number of shares the Power Division officials got.

A senior officials of the DESCO said that the officials and employees of the Power Division are not permanent in the ministry; they might be transferred to any other ministry any time -- so according to rule, only the company officials and employees can get a portion of the shares, not the ministry personnel. There is no such instance too, he said.

However, according to the rule of public companies, DESCO Chairman and Directors cannot get shares. But Akhter Hossain misused his power and obtained DESCO shares. He gave a portion of shares to other officials to satisfy them.

Despite repeated attempts over telephone, ANH Akhter Hossain could not be contacted. He was transferred to Water Resource Ministry after the government of Dr Fakhruddin Ahmed took over. Akhter got some hasty promotion under the past alliance government. But present government demoted him. Then he went for a self retirement. There is an allegation that two State Ministers had to go because of influence of this mighty Secretary.

Saleh Ahmed, Managing Director of the DESCO said that the shares were distributed among the officials and employees of Power Division following the then Chairman. “I just followed his the order,” said the MD.

He informed that the ministry provided the decision to distribute the share among the officials and employees of the Power Division, from the 10 percent shares allotted for the DESCO officials and employees. Saleh Ahmed confessed that Akhter Hossain himself provided the decision.

He acknowledged that he got 2,700. “High-ups got bigger portion and lower level smaller portion,” he said. Replying to the question that why he took the share in personal name, he said: It was a decision of the board to reward for DESCO’s better performance. After getting shares, officials and employees now feel more encouraged.

When contacted, economist professor Abu Ahmed of the Dhaka University, said it was not illegal if the officials and employees of DESCO take the shares but the officials and employees of the Power Division cannot take a portion as they don’t have any right. According to the regulation of Securities and Exchange Commission, he said, it has been an illegal action and should bring under judgment.

Jafrullah Khan, the recently appointed Power Division Secretary, said that he did not know anything about the matter. “None informed regarding the issue,” he said.

When asked whether official or employee of the ministry can take shares, he answered, “If they took it, I think they got under any rule. And if they broke the rule certainly I’ll verify it.” He added: If someone takes the share as the Secretary it should remain under the Secretary’s account. If it was taken after any person’s name, it’s a different matter.

The DESCO was listed in the stock market in June last year. It offloaded 3,177,985 shares in the market preserving 317,798 shares (10 percent) for the officials and employees. The rest of the 2,860,187 share were launched for the public. The company has been supplying electricity commercially since 1998. The amount of DESCO’s paid up capital is nearly Tk 127 core.