Global investors including JPMorgan eye Bangladesh but need trust in audits: Khosru
He alleged that funds had been taken out of banks through money laundering and misrepresentation, often involving board members themselves.
Global fund managers, including JPMorgan, are interested in investing in Bangladesh, but restoring their confidence will require accurate and reliable audit reports and stronger institutional governance, Finance Minister Amir Khosru Mahmud Chowdhury said today (20 May).
Speaking at the FAR Summit titled "Trustworthy Financial Reporting: What Really Matters," organised by the Financial Reporting Council at Pan Pacific Sonargaon hotel in the capital, Khosru said he regularly meets international fund managers who are showing growing interest in Bangladesh despite concerns over financial transparency and governance.
Through false representation, companies were listed on the stock market, and the falsely listed shares became highly traded.
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"The country's economy has gone through turbulent times in recent years," he said, adding that economic and financial institutions had become dysfunctional, while watchdog and regulatory bodies failed to perform their duties properly.
"We are at a crossroads. Where we go will depend on the functioning of institutions," the minister said.
Financial indiscipline and capital deficit
Khosru said the country's financial ecosystem, particularly the banking sector, had "almost collapsed" due to widespread indiscipline, misrepresentation and the siphoning off of funds.
"Through false representation, companies were listed on the stock market, and the falsely listed shares became highly traded," he said.
He added that such irregularities discouraged fundamentally strong companies from entering the capital market because they were unwilling to compete in an uneven environment.
According to the minister, the private sector is now facing a serious capital shortage, while the banking sector is also grappling with capital deficits.
"Many successful companies are going through severe capital shortages. Many banks are also facing deficits," he said.
He alleged that funds had been taken out of banks through money laundering and misrepresentation, often involving board members themselves.
"A scenario where board members sit on loan approval committees is, in my personal opinion, a conflict of interest," Khosru said. "If I have a conflict of interest somewhere, I cannot sit there and make those decisions."
He stressed that rebuilding investor confidence would require transparency and accountability across the financial sector through coordinated efforts from regulators, auditors and corporate entities.
Push for deregulation
The finance minister also said the government is moving towards "serious deregulation" in the capital market, financial sector and revenue administration, including the National Board of Revenue.
However, he warned that deregulation will not succeed without credible audit practices.
"We can deregulate, but if audit reports are inaccurate, it will not bring any benefit," he said.
Khosru urged professional accounting bodies, including the Institute of Chartered Accountants of Bangladesh and the Institute of Cost and Management Accountants of Bangladesh, to strengthen oversight of their members instead of limiting their activities to annual meetings and social events.
"Their responsibility is also to monitor what their members are doing," he said.
Concerns over financial reporting
Rashed Al Mahmud Titumir, adviser to the prime minister on finance and planning, said distorted information in the past had harmed genuine entrepreneurs while allowing dishonest businesses to gain unfair advantages.
He said international assessments had raised concerns over the credibility of Bangladesh's financial reporting system, which contributed to lower-than-expected foreign direct investment inflows.
BGMEA President Mahmud Hasan Khan said poor accounting practices were one of the key reasons behind the collapse of thousands of garment businesses.
He said around 7,200 BGMEA members had once registered or started operations, but only around 2,500 to 2,550 factories remain active today.
