Probe panel formed over alleged irregularities at Beacon Pharma

The Bangladesh Securities and Exchange Commission (BSEC) has formed a three-member committee to investigate alleged financial irregularities and fraud at Beacon Pharmaceuticals.

According to a BSEC order, the Bangladesh Financial Intelligence Unit (BFIU) recently reported suspicious financial practices by the listed drug maker, prompting the regulator to order a detailed inquiry in the interest of investors.

The commission said the investigation will examine allegations that Beacon Pharmaceuticals extended loans to other entities in violation of securities rules and sold its manufactured medicines through Beacon Medicare, a sister concern, in a manner that may have misled shareholders.

The probe will also look into claims that funds borrowed by Beacon Pharmaceuticals were used to adjust the liabilities of Beacon Medicare Limited, rather than being applied for the purposes stated in company disclosures.

Besides, the committee will verify allegations that loan proceeds and overdraft facilities obtained by Beacon Medicare were transferred to personal accounts and invested in the stock market.

BSEC said the pattern of transactions points to possible fraud, deception and other irregularities in the capital market, requiring a detailed investigation.

The committee comprises Sheikh Mahbub Ur Rahman, director of BSEC, Md Sirajul Islam, deputy director, and Binoy Das, assistant director.

The investigation team has been asked to complete its work and submit a report to the commission within 60 working days from the date the order was issued.

In March last year, The Daily Star ran an investigative report, which detailed how Beacon Pharmaceuticals stopped exporting drugs directly and instead sold them to its privately owned sister concern, Beacon Medicare.

That report mentioned transfer pricing, undisclosed related party transactions and large loans to group entities, practices that analysts said eroded profits at the listed company and harmed the interests of general shareholders.