LR Global Bangladesh Asset Management Company Ltd will no longer be asset manager of the two mutual funds
The stock market regulator, BSEC, on Sunday approved the appeal of majority unitholders for changing the asset manager of DBH First Mutual Fund and Green Delta Mutual Fund.
As a result, LR Global Bangladesh Asset Management Company Ltd will no longer be asset manager of the two mutual funds.
Meanwhile, the Bangladesh Securities and Exchange Commission appointed IDLC Asset Management Limited as the new asset manager of the funds with immediate effect.
The approval was given at a commission meeting, presided over by the BSEC Chairman M Khairul Hossain, held at its headquarters, said a BSEC statement on Sunday.
Earlier, the majority unitholders of the two mutual funds sent separate latter to their trustee Bangladesh General Insurance Company (BGIC) for changing their asset manager. The trustee forwarded the letters to BSEC for final approval.
The unitholders wanted appointment of IDLC Asset Management Limited as the new asset manager of the funds.
Around 72.75% unitholders of DBH First Fund and 70.10% of Green Delta Mutual Fund called for changing the asset manager.
As per mutual fund rules 2001 of the Bangladesh Securities and Exchange Commission, if two-thirds of unitholders of a mutual fund want to cancel an asset manager, the trustee has to cancel the asset manager.
For the change of asset management company of a mutual fund, the unitholders' meeting was not required.
Among the unit holders BRAC Bank, NCC Bank, EBL, Agrani Equity, Delta Life, Green Delta Insurance, IDLC Investments, IDLC AML, VIPB Asset Management, Edge Asset Management, Vanguard Asset Management, Delta Brac Housing Finance, Delta Life Insurance and Asian Tiger Capital Partners Asset Management applied for the change.
On December 8, the Supreme Court froze a High Court order which stayed the process of changing the asset manager of two mutual funds.
Earlier, 78.42% unitholders of the closed-end DBH First Mutual Fund sought liquidation of the fund, which will mature in February 2020.
The unitholders’ proposal came after LR Global had sought extension from the BSEC for another 10 years for the mutual fund.
LR also sought BSEC permission to convert the closed-end DBH First Mutual Fund into open-end fund.
On February 2015, the BSEC banned LR Global from floating new fund or scheme for one year after finding the asset manager invested in some non-approved private equities breaching securities rules.
In addition for its wrongdoing, the commission also fined LR Global Tk50 lakh and trustee Bangladesh General Insurance Company Tk25 lakh and auditor Hoda Vasi Tk5 lakh.