The Bangladesh Securities and Exchange Commission (BSEC) has sought an explanation from two companies owned by cricket superstar Shakib Al Hasan for entering the country's gold market without securing the necessary approval.

The market regulator issued letters to the managing directors of Reliable Commodity Exchange Company and Buraq Commodities Exchange Company asking them to clarify their stance and respond by 25 May.

Besides, the Bangladesh Bank governor, secretaries to the Economic Relations Division (ERD) and the commerce ministry have also been notified of the violation.

The letters – signed by BSEC Assistant Director Md Mosavvir Al Ashick – state that the two companies cannot be involved in gold trade as per the Securities and Exchange Ordinance 1969.

A source in the BSEC said the problem is with the name and fashion of their business. They created their firms to facilitate commodity trading in a way that is done through a regulated commodity exchange proposed by the Chittagong Stock Exchange.

Referring to Section 8 (4) of Securities and Exchange Ordinance 1969, the commission wrote that a person or company which is not a member of the stock exchange will be barred from entering a commodity future contract and launching a business.

According to the 1969 ordinance, Commodity Futures Contract means an agreement to purchase or sell a particular commodity for delivery or settlement in the future at a price to be determined by a contract that obligates each party to fulfil the contract at the specified price and that may be settled by delivery, cash or offset at the commodity exchange duly registered with the commission.

And relating to commodity futures the expression "commodity" includes – agricultural, livestock, fishery, forestry, mining or energy goods, and any product that is manufactured or processed from any such goods; and any other matter as may be notified by the commission in the official gazette, it added.

Thus the companies owned by Shakib cannot trade gold and "No person other than a member shall act as a broker or a [jobber or dealer] for any security not listed on the stock exchange," the letters read.

On 22 April, Shakib announced the launch of Swiss-made 24K minted gold bars in variable denominations, in association with local lifestyle brand QRIUS at a showroom in Banani.

According to sources, Shakib's Buraq Commodities Exchange Company did receive approval from the Bangladesh Bank for legally importing and selling gold bars and ornaments.

However, they did not secure permission from the BSEC in this regard, the sources added.