The Capital Stock Market Mafia: How Nafeez Sarafat Rose to Power and Shaped Bangladesh’s Financial Landscape

Few individuals have left as deep a mark on Bangladesh’s financial market as Chowdhury Nafeez Sarafat. From mutual fund extensions to IPO lobbying, his actions have shaped the country’s investment landscape — and raised serious questions about power and accountability.

Few individuals have shaped Bangladesh’s capital market as profoundly as Chowdhury Nafeez Sarafat. For more than a decade, his reach extended across the financial sector, touching everything from mutual fund management to major corporate listings. Market insiders say there was rarely a decision that did not bear his influence — whether it involved extending mutual fund tenures, approving listings, or allocating placement shares to politically and financially connected allies.

Race Asset Management, which began its journey through the EBL First Mutual Fund, now manages thirteen mutual funds, both open-end and closed-end. Originally, ten of these funds were structured to last ten years, but their tenure was controversially extended by another decade, a move widely attributed to Sarafat’s lobbying power.

At the time, Professor M Khairul Hossain, then Chairman of the Bangladesh Securities and Exchange Commission (BSEC), later acknowledged that the extension had not been his idea. “I had initially rejected the proposal,” he stated, “but the late finance minister Abul Maal Abdul Muhith sent instructions to permit it. I had to comply.”

By 2013, just five years after its founding, Race Asset Management was already overseeing ten closed-end funds. As of June 30 this year, that number had grown to thirteen, with assets valued at Tk3,200 crore at cost and Tk2,350 crore at market value. Insiders allege that these funds were sometimes used to serve Sarafat’s personal interests.

Sarafat’s network reportedly included influential figures such as Salman F Rahman and Nazrul Islam Majumder. Majumder was even brought into Sarafat’s media ventures. It is widely believed that when Rahman encouraged investment to strengthen Beximco’s stock price, Sarafat followed suit by channeling mutual fund money into Beximco shares — only to later sell those holdings without Rahman’s knowledge, triggering a market drop and straining their relationship.

After his falling out with Rahman, Sarafat reportedly built ties with former Finance Minister AHM Mustafa Kamal and then Finance Secretary Abdur Rouf Talukder. Through these connections, he allegedly pushed for the direct listing of Best Holdings Ltd. Although initially denied, he succeeded later through BSEC under Professor Shibli Rubayat-Ul-Islam. Notably, placement shares of Best Holdings were said to have been issued in the names of former IGP Benazir Ahmed’s daughters — one of several cases where Sarafat allegedly used such shares to curry favor with powerful figures.

Sarafat was also known for his role in the Coppertech Industries IPO, where he allegedly distributed placement shares to influential people to gain support. Despite controversies over falsified financials, Coppertech’s listing was eventually approved after regulatory exemptions were issued. The audit firm Ahmed & Akhter was suspended for its role, while MTB Capital CEO Khairul Bashar Abu Taher Mohammad, who oversaw the IPO, later became DSE’s Chief Regulatory Officer with Sarafat’s backing.

Throughout his career, Sarafat faced few consequences. Even when decisions were made to inspect Race Asset Management, investigations were often delayed or ignored. The BSEC, acting on ministry recommendations, continued to extend fund tenures rather than take disciplinary action.

His influence extended far beyond asset management. Sarafat reportedly pressured public institutions to invest heavily in his ventures. Former BIFFL Managing Director Farmanul Islam publicly alleged that Sarafat lobbied for a Tk500 crore bond investment in Best Holdings during a meeting attended by top officials — and was subsequently forced to resign.

Sarafat’s business empire eventually encompassed Unique Hotel & Resorts, National Tea Company, and Unique Meghnaghat Power Plant, a 584 MW project operated through Strategic Finance Ltd (SFL). Although Unique Group was the main investor, Sarafat’s negotiations enabled him to secure substantial profits with minimal investment. When 24% equity was sold to Qatar’s Nebras Power for USD 24 million, SFL alone gained more than Tk100 crore.

In recent years, under new leadership, Race Asset Management has sought to distance itself from its controversial past. The company has focused on strengthening governance, improving transparency, and ensuring compliance with BSEC standards. Recent strategic block market transactions were aimed at enhancing liquidity and investor confidence, signaling a shift toward responsible, modern fund management.

Still, the shadow of Nafeez Sarafat’s influence looms large — a reminder of how one man’s ambition and connections helped shape, and at times destabilize, Bangladesh’s capital market.