The Bangladesh Securities and Exchange Commission (BSEC) has imposed Tk 22.75 crore fine on Vanguard Asset Management Limited for violating securities laws in connection with two separate investment transactions made through the Vanguard AML Rupali Bank Balanced Fund.

The decisions were taken at a meeting of the BSEC held on Tuesday with its Chairman Khondoker Rashed Maqsood in the chair, according to a press release issued on Wednesday.

In the first case, Vanguard Asset Management Limited, in 2013, invested a total of Tk 1.50 crore from the Vanguard AML Rupali Bank Balanced Fund into shares of Bengal Poly & Paper Sack Limited, at Tk 25 per share, including a Tk 15 premium, on the face value of Tk 10, in violation of securities laws.

The commission found this investment unlawful and ordered Vanguard to refund Tk 5.74 crore (principal plus applicable returns) to the fund within 30 days of the order.

As Vanguard failed to deposit the amount within the stipulated deadline, the BSEC additionally resolved to impose a fine of Tk 6.75 crore on the company.

In the second case, in 2017, Vanguard Asset Management invested a total of Tk 6 crore from the same fund into 48 lakh shares of AFC Health Limited at Tk 12.50 per share, including a Tk 2.50 premium, over the face value of Tk 10, again in breach of securities laws.

The commission ordered Vanguard to return Tk 14.85 crore (principal and returns) to the fund within 30 days. Following its failure to comply, Vanguard was further fined Tk 16 crore in this case.

The BSEC also decided that if Vanguard fails to pay the imposed fines within seven days after the expiry of the 30-day deadline, the amounts will be treated as the company's own liability. An additional fine of Tk 10,000 per day will be levied for each day of continued non-payment beyond that period.

It also held the Investment Corporation of Bangladesh (ICB), which serves as trustee of the mutual fund concerned, accountable for failing to exercise adequate oversight and discharge its duties properly, a lapse that contributed to the losses suffered by unit-holders of the fund. Accordingly, the BSEC resolved to impose a fine of Tk 15 lakh on ICB.

Separately, the BSEC noted that the fund's auditor, Malek Siddiqui Wali & Co, Chartered Accountants, failed to clearly flag in its audit report the matter of the fund retaining 99 percent of these illegal investments.

The commission resolved to refer the firm to the Financial Reporting Council for appropriate action.