Auditors question trustee's failure to convene meetings on discounted funds
The auditor noted that the trustee had failed to convene such meetings despite discount levels significantly breaching the 25% statutory threshold.
Auditors have issued qualified opinions on the financial statements of multiple closed-end mutual funds managed by ICB Asset Management Company Limited (ICB AMCL), citing the trustee's failure to convene mandatory unitholder meetings despite the funds' market prices trading at steep discounts to their net asset values (NAVs).
Chartered accountancy firm MJ Abedin & Co, led by Partner Harun Mahmud, issued qualified audit reports for the fiscal year ended 30 June 2026 for eight funds for which Investment Corporation of Bangladesh (ICB) acts as trustee and ICB AMCL as asset manager, according to disclosures filed with the Dhaka Stock Exchange (DSE) today (21 September).
Under the BSEC Mutual Fund Rules 2025, if a fund's six-month average market price falls more than 25% below its NAV at fair value, the trustee is required to convene a unitholders' meeting to consider converting the fund into an open-ended scheme or liquidating it.
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The auditor noted that the trustee had failed to convene such meetings despite discount levels significantly breaching the 25% statutory threshold.
Among the flagged schemes, Phoenix Finance 1st Mutual Fund recorded the widest gap, with its six-month average trading price of Tk4 sitting 54.75% below NAV. IFIL Islamic Mutual Fund-01 followed with a 45.87% discount at Tk4.20.
The auditor also flagged IFIL Islamic Fund for non-compliance with its trust deed after investing Tk41.39 crore in listed companies outside the DSEX Shariah Index, including ACME Laboratories, whose debt levels exceeded allowable limits.
Other non-compliant funds include Prime Bank 1st ICB AMCL Mutual Fund at a 45% discount, ICB AMCL Sonali Bank Limited 1st Mutual Fund at 44.32%, ICB AMCL Third NRB Mutual Fund at 43.41%, ICB AMCL Second Mutual Fund at 35.07%, ICB Employees Provident Mutual Fund One: Scheme One at 32.94%, and ICB AMCL First Agrani Bank Mutual Fund at 27.5%.
Furthermore, ICB AMCL Third NRB Mutual Fund was cited for failing to recognize expected credit losses on a long-pending Tk6.73 lakh receivable from the Capital Market Stabilisation Fund as required by International Financial Reporting Standard.
Reflecting market stress, trustee committees declared "No Dividend" for FY26 across seven of the eight funds, with ICB AMCL First Agrani Bank Mutual Fund being the sole exception after announcing a 4% cash payout.
