Shibli Rubayat-Ul-Islam, chairman of the Bangladesh Securities and Exchange Commission (BSEC), allegedly received payments from a bank account linked to a multi-million-dollar fraud, according to a report of the Organized Crime and Corruption Reporting Project (OCCRP).

The OCCRP is an investigative reporting platform for a worldwide network of independent media centres and journalists.

At the heart of the accusations was a convicted scammer, Javeed Matin, whom Islam had met at university and had been friends with for two decades, the report said.

It said throughout much of 2020, Matin helped launder the proceeds of a scheme that defrauded a Hong Kong-based supply chain and sourcing company, Ming Global Limited, out of more than $13 million.

Under the pretence of an investment, these funds were sent to two accounts held by a US company, Monarch Holdings Inc, which then wired over $800,000 to Islam's personal account and to the accounts of a Bangladeshi company he appeared to be behind.

Out of this amount, Islam received about $278,000 into his personal account between late June and late July, 2020, bank records show. About $564,000 more was sent from Monarch's accounts to an account held by a company called Xin Bangla Fabrics.

OCCRP was unable to obtain Xin Bangla's current ownership information, because of difficulties with the company registry. But Islam was listed in public documents as Xin Bangla's contact person, including in a 2007 Swiss embassy newsletter about a Bangladeshi-Swiss business forum. He is also listed as the company's managing director in an online registry of Bangladesh companies.

Current ownership details were unavailable, said the OCCRP.

Ming Global filed a lawsuit against Monarch in the US in 2020 but later shelved it, which, the company's director told that the OCCRP, was because none of the defendants — or the money that was allegedly stolen — are in the country.

The company also filed a suit to recover funds in Bangladesh from Islam, who has filed a counter-suit against them. The country's Anti-Corruption Commission has taken no apparent action since it received the complaint against Islam nearly two years ago, the OCCRP report said.

"The legal system is one of the biggest disappointments of all this," Ming Global Director Sarath Kumar Hegde told the OCCRP.

After the alleged scam took place, the BSEC approved Matin's Bangladeshi company, also called Monarch Holdings, to receive a stock-trading licence, even though Matin had been convicted for a 2010 "pump-and-dump" tax fraud scheme in the US, which should have disqualified him under Bangladeshi law.

The chairman of the BSEC does not personally approve the licences and the OCCRP found no evidence he influenced the process, the report added.

Prof Islam told The Daily Star yesterday that he received $277,924 into his bank account as advance rent, security deposit and advance construction costs under a lawful lease agreement.

"I received the money through legal channels. If I had any bad intention then why would I bring the money into the country and that too even using the legal channel?" he asked.

He said when Ming Global claimed that its fund was sent to him, he realised that it was a complex issue.

"So, I have surrendered the money to the court. The court will decide who will get the fund," he said.