Auditor’s observation on bdnews24.com, LR Global deal

LR Global Bangladesh, an affiliate of a New York-based asset management company (AMC), invested Tk 50 crore in bdnews24.com, a non-listed firm, about one and a half years ago. It used the money from six mutual funds managed by the AMC to purchase ownership of the news portal by allegedly breaching the securities rules.

In line with securities rules, the AMC in a filing with the Dhaka Stock Exchange on Wednesday revealed the auditor’s observation about its use of money of three mutual funds in buying shares of the online news portal.

The trustees of the MBL 1st Mutual Fund, AIBL 1st Mutual Fund and NCCBL Mutual Fund-1 did not agree with the valuation policy used by the AMC during the year to make the valuation of the bdnews24.com and the trustee made a zero valuation of the news portal, said the audit report ended on March 2020.

“The valuation of the bdnews24.com is not compliant with the mutual fund rules,” it said.

The AMC of the MBL 1st Mutual Fund has made an investment of Tk54,950,000 through purchase of 4,396 ordinary shares of Tk 100 each of the news portal during the year 2019. Out of the ordinary shares, 50% or 2,198 shares were directly purchased from the news portal and the remaining 2,198 shares purchased from Toufique Imrose Khalidi, the managing director of bdnews24.com, noted the audit report.

It also said the fund has been kept in FDRs of different banks in Bangladesh by the news portal and its managing director and the balance of the FDRs including interest stood at Tk 455,808,889 as on December 6, 2020.

The AMC of the AIBL 1st Mutual Fund has made an investment of Tk 54,350,000 through purchase of 4,348 ordinary shares of Tk100 each of bdnews24.com during the year 2019. Out of the ordinary shares, 50% or 2,174 were directly purchased from the news portal and the remaining 2,174 shares purchased from Khalidi, said the report.

The fund has been kept in FDRs of different Banks in Bangladesh by the portal and its managing director and the balance of the FDRs including interest stood at Tk 455,808,889 as on December 6, 2020.

The AMC of the NCCBL Mutual Fund-1 has made an investment of Tk 59,725,000 through purchase of 4,778 ordinary shares of Tk 100 each of the portal during the year 2019. Out of the ordinary shares, 50% or 2,389 shares were directly purchased from the bdnews24.com and the remaining 2,389 shares were purchased from Khalidi.

The Bangladesh Securities and Exchange Commission put LR Global's investment in the online news portal on hold on October 13, 2019, a week after the two organisations made the deal.