Govt withdraws notice only hours after its issuance

The government issued Wednesday a notification prohibiting public servants from being involved in any kind of speculative business, including investment in the capital market, only to withdraw it after a few hours due to 'unavoidable' circumstances.

A circular, signed by senior secretary of the ministry of public administration Abdus Sobhan Sikder, was issued Wednesday afternoon directing the employees and officials of the government, semi-government and autonomous bodies to refrain from investing in the capital market. The circular was issued in compliance with the relevant Public Servant (conduct) rules, 1979.

When contacted by the FE, Sikder, however, confirmed the withdrawal of the said notification in the same evening.

"The notification has been postponed for the time being due to some unavoidable circumstances," Mr. Sikder said.

When asked about the procedure of postponing the notification, he said it had been done in line with the 'required process.'

"The rules, under which the notification has been issued, remain unchanged. But the ministry has just suspended the action of the notification," he said.

"All employees and officials of the government, semi-government and autonomous bodies have been directed not to invest in the capital market," said a government notification issued on Wednesday by the public administration ministry.

The notification was issued in line with the sub-rule 15 of the 'The Government Servants (Conduct) Rules, 1979'.

The ministry issued the notification following a decision taken at the cabinet meeting, held Monday with Prime Minister Sheikh Hasina in the chair.

According to the rules, no government servant shall speculate in investments. For the purpose of this sub-rule, the habitual purchase and sale of securities with notoriously fluctuating value shall be deemed to be speculation in investments.

"No government servant shall make, or permit any member of his family, to make any investment likely to embarrass or influence him in the discharge of his official duties," sub-rule 15 (2) said.

It also stated that no government servant shall make any investment, the value of which is likely to be affected by some event, of which information is available to him as a government servant and is not equally available to the general public.

"If any question arises whether a security or an investment is of the nature referred to in any of the foregoing sub-rules, the decision of the government thereon shall be final," the rules added.

The notification also advised the authorities to cautiously give permission to the family members of the public servants in making investment in the stock market.

The notification said it has recently been noticed that a section of public servants is participating in the investments, centring speculation.

"Such kind of investment is a violation of the sub-rule 15 of 'The Government Servants (Conduct) Rules, 1979," the notification said.

That's why the government has directed the public servants to refrain from such speculation in investment.

Earlier, the Securities and Exchange Commission (SEC) Chairman Professor M Khairul Hossain Wednesday morning claimed that no decision regarding the prohibition of public servants' stock investment had been taken at the cabinet meeting held on Monday.

Professor Khairul said this at a press briefing held at the SEC office before the trading hours with a view to removing the confusion created among the investors.

At the press briefing, other SEC members were also present.

"At the cabinet meeting the issue of government servants' service rule, 1979 was discussed. It has been ensured through the consultations with the authorities concerned that no decision regarding the prohibition of public servant's share investment was taken in any stage of the meeting," Professor Khairul said in his written speech.

Mr Khairul said the truth is that the cabinet brought revision to the income tax laws as a part of the implementation of the stock market rejuvenation package declared in line with the directive of the Prime Minister.

Mr Khiarul also termed the media reports on the issue a 'source of confusion' among the investors.

"Confusion was created among different stakeholders related to stock market following reports published after the cabinet meeting held January 16, 2012," he said in his written statement.

There was however mismanagement on the part of the SEC over holding of the press briefing. On Tuesday, it had invited a select group of journalists. On Wednesday morning, it made phone calls to some other newsmen inviting them to the briefing only five minutes before the schedule time. As a result, many of the newsmen invited late could not cover the event.

News Source: Financial Express