ICB’s Tk220cr Mutual Fund Dispute: Race Defends Transparency and Legal Compliance

Amid allegations of Tk220 crore irregularities, Race Asset Management asserts its clean record and vows legal defense against ICB’s misleading claims.

In Bangladesh’s capital market, Chowdhury Nafeez Sarafat remains one of the most discussed and influential figures — admired by some for his ambition and criticized by others for his controversial methods. His rise to prominence coincided with the rapid growth of Race Asset Management, a firm that would become central to both his power and notoriety.

Founded through the EBL First Mutual Fund, Race Asset Management grew to oversee thirteen mutual funds, both open- and closed-end. Ten of these funds, originally meant to be dissolved after ten years, were instead extended by another decade — a decision insiders credit to Sarafat’s lobbying strength.

At the time, BSEC Chairman M Khairul Hossain confessed that he had initially refused to approve the extensions. “I had rejected the proposal,” he said, “but the late Finance Minister Abul Maal Abdul Muhith intervened, and we were instructed to permit it.”

By 2013, Race managed ten closed-end funds; by June 2024, the number reached thirteen, with a total asset value of Tk3,200 crore at cost and Tk2,350 crore at market value. Market sources allege that many of these funds were maneuvered to benefit Sarafat personally.

His connections ran deep, reaching figures like Salman F Rahman and Nazrul Islam Majumder. At one time, Sarafat was known to invest in Beximco shares at Rahman’s encouragement. But when Sarafat later sold the shares, allegedly without Rahman’s knowledge, it led to a rift between them.

Sarafat then forged relationships with Finance Minister AHM Mustafa Kamal and Finance Secretary Abdur Rouf Talukder, through whom he pursued the Best Holdings Ltd. direct listing. Although denied initially, approval was later secured under Professor Shibli Rubayat-Ul-Islam’s BSEC. Placement shares, according to reports, were allocated to the daughters of former IGP Benazir Ahmed, among others, as part of Sarafat’s efforts to maintain influence.

His name was also linked to the Coppertech Industries IPO, a case that shocked market observers for its irregularities. Despite questionable financials, Coppertech was listed after significant lobbying efforts at multiple levels. The audit firm Ahmed & Akhter was penalized, yet Sarafat’s pressure reportedly led to regulatory exemptions being granted. Later, Khairul Bashar Abu Taher Mohammad, who handled the IPO, became the Chief Regulatory Officer of the DSE, allegedly with Sarafat’s help.

Even with mounting allegations, Race Asset Management escaped regulatory sanctions. Inspections ordered by BSEC were delayed or ignored, and fund extensions continued under ministerial directives.

Beyond asset management, Sarafat expanded into large-scale ventures — notably the Unique Meghnaghat Power Plant, a 584 MW project. Through Strategic Finance Ltd (SFL), where he served as Managing Director, Sarafat earned over Tk100 crore when Qatar’s Nebras Power acquired 24% equity for USD 24 million.

Under new leadership, Race has since taken steps to strengthen governance and transparency. Its renewed focus on compliance and investor protection marks a sharp shift from its controversial past.

Still, Chowdhury Nafeez Sarafat’s story serves as a revealing chapter in Bangladesh’s financial history — one defined by ambition, influence, and the blurred boundaries between power and regulation.