The Bangladesh Securities and Exchange Commission (BSEC) has alleged that manipulators were fuelling protests against the regulator to prevent it from taking a stand against corruption and reforming the stock market.

The involvement of manipulators and an "AGM Party" was uncovered through an investigation, the BSEC said in a letter sent to the Financial Institutions Division of the Ministry of Finance on Sunday.

According to the BSEC, "AGM Party" are people who pass agendas at annual general meetings (AGM) of listed companies in order to take illegal benefits.

Protests have been staged outside the BSEC office in Agargaon and in Motijheel for more than a week.

These so-called investors came under the banner of the general investors but in reality they are not general investors, the BSEC said.

They are trying to destabilise the situation with their demands, most of which are illogical. They also raised questions regarding the companies that were sent to the Z category.

Recently, the stock exchanges demoted 27 companies to Z category from A and B categories as they failed to pay dividends properly.

The BSEC said its mandate is only to monitor whether the rules and regulations were followed in demoting the companies. Its job is not to look after the indices but to ensure accountability and transparency.

Since the fall of the Sheikh Hasina government on August 5, the DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), has fallen by 283 points, or 5 percent, to 5,335 points till yesterday.

There is an official process to submit demands and the regulator should have been given proper time to scrutinise those, the letter said.

However, they placed their demands in the media and urged for the resignation of the BSEC chairman. After that, they came to the BSEC office and locked its gate.

It indicates that some people are being used in order to stop the BSEC's reform activities, it said.

To maintain transparency and accountability, the regulator must take punitive steps which may not satisfy everyone, the letter read.

"Clearly, the activities of the undisciplined people are ill-motivated.

"The BSEC found in its investigation and analysis that the AGM Party and some people involved in a lot of corruption are against punitive actions and reforms, so they are fuelling the protests."

They fear that their manipulation will be stopped if all reform activities are carried out, it said.

In order to gauge the present situation of the stock market, the BSEC said the new commission met with several stakeholders to unearth problems and ways out.

It has already formed several investigation committees to reveal corruption and manipulation in the past 15 years.

The last commission hardly took legal steps against manipulators, but the present one has taken proper legal action against delinquents.

Last week, the BSEC imposed a record fine of Tk 428.52 crore on 9 individuals and firms for manipulating the stocks of Beximco Ltd.

Three audit firms were removed from the BSEC's audit panel as they failed to enlist in the Financial Reporting Council (FRC).

It also cancelled the bond issuance of several banks as they failed to fulfil all the conditions and cancelled the share issuance of several companies for non-compliance, the BSEC said.

The regulator is going to take steps against companies that failed to provide announced dividends timely.

At the same time, it has taken steps against brokerage house owners who misused investor funds.

The BSEC fined 25 individuals and firms for their involvement in corruption and froze around 60 beneficiary owners' accounts of potential manipulators.

It is investigating the manipulation of 24 companies' stocks and the misuse of several mutual funds.

Ataullah Naim, president of the Bangladesh Capital Market Investors United Association, told The Daily Star they have not staged any protests on the road.

"We have only placed our demands in a press briefing. We do not know who is protesting in front of the BSEC or whose purpose they are serving."

The commission said in the letter that the protesting investors came in front of the BSEC under the banner of 'Puji Bazaar Biniog Kari Oikko Porishod'.

Most of their investors are demanding the resignation of the BSEC chairman.