4 RACE managed funds face special audit for trustee change

Four mutual funds under RACE Asset Management will undergo a special audit as part of the Bangladesh Securities and Exchange Commission’s (BSEC) plan to change their trustee.

The commission has decided to replace Bangladesh General Insurance Company (BGIC) with the Investment Corporation of Bangladesh (ICB) as trustee of the funds. 

The commission made the decision during a meeting on 3 December and sent a letter to ICB regarding the matter last week, according to officials.  

Currently, BGIC acts as the trustee for the Popular Life 1st Mutual Fund, PHP First Mutual Fund, EBL NRB Mutual Fund, and AB Bank 1st Mutual Fund. A trustee serves as the guardian of a fund, ensuring that investors’ interests are upheld and that the fund operates in compliance with all rules and regulations.  

The BSEC has instructed ICB – a specialised state-owned financial institution supporting the country’s capital market – to conduct a special audit and submit the report to the commission within 30 working days. 

Additionally, the commission has directed all related parties to fully cooperate with ICB during the special audit process.  

Mohammad Rezaul Karim, executive director and spokesperson for the BSEC, declined to comment on the matter. 

However, BSEC officials, speaking on the condition of anonymity, told The Business Standard that the commission identified a conflict of interest between the trustee and the asset management company, along with instances of non-compliance. To safeguard investors’ interests, the BSEC initiated this move.  

BSEC officials said the commission believes ICB would be a better choice than BGIC as the trustee for these mutual funds. ICB has also expressed interest in becoming the trustee. Following the completion of the special audit, the commission will make further decisions, they added.  

Popular Life 1st Mutual Fund was listed in October 2010 with an initial fund size of Tk200 crore. In FY23, its net assets stood at Tk306.93 crore. However, in FY24, the fund’s Trustee Board declared no dividend for its unit holders. 

The fund reported an earnings per unit (EPU) loss of Tk1.78. Its net asset value (NAV) per unit was Tk8.23 at market price and Tk11.12 at cost price.  

PHP First Mutual Fund was listed in November 2010 with an initial fund size of Tk200 crore. By FY23, its net assets stood at Tk288.11 crore. In FY24, the Trustee Board also declared no dividend for its unit holders. 

The fund recorded an EPU loss of Tk1.87. Its NAV per unit was Tk8.15 at market price and Tk11.07 at cost price.  

EBL NRB Mutual Fund, listed in May 2011, had an initial fund size of Tk150 crore. In FY23, its net assets stood at Tk244.07 crore. The Trustee Board declared no dividend for unit holders in FY24. 

The fund posted an EPU loss of Tk1.87. Its NAV per unit was Tk8.25 at market price and Tk11.12 at cost price.  

AB Bank 1st Mutual Fund was listed in January 2012 with an initial fund size of Tk150 crore. Its net assets stood at Tk252.65 crore in FY23. Similar to the others, the Trustee Board declared no dividend for unit holders in FY24. 

The fund reported an EPU loss of Tk1.37. Its NAV per unit was Tk8.69 at market price and Tk11.37 at cost price.