Regulator finds massive irregularities in trading shares of 12 companies

The Bangladesh Securities and Exchange Commission (BSEC) has found evidence of massive irregularities in share trading of 12 listed companies.

Due to irregularities, each of these companies saw a significant hike in their share prices at the bourses in recent years.

The enforcement team of the capital market regulator is going to take necessary legal steps soon against responsible people and entities, a BSEC press release said yesterday.

The commission found that eight people and two firms remain behind manipulation in share prices of these 12 companies.

These people and firms will remain barred from withdrawing and transferring of funds, and transferring of securities from their linked accounts until legal actions are taken as per the investigation report.

The account holders include: Bishwajeet Das and his wife, Kazi Md Shahadat Hossain and his firm B&BS Trade International, Md Saif Ullah, Hossam M Shiraz, ASS Ahsan Habib Choudhury, Md Lutful Gani Tito and his wife, along with his firm Shatrong Agro Fisheries Ltd.

However, all these people and firms are allowed to buy and sell securities in the secondary market regularly, the BSEC release said.

The BSEC, in an investigation, found various securities crimes by these people and firms, which include insider trading, market manipulation, series trading, circular trading, financial data manipulation, illegal short selling, excessive margin loan disbursement to create additional demand of targeted securities et cetera.

At the 696th meeting yesterday with its Chairman Dr M Khairul Hossain in the chair, the BSEC decided to send the findings to the enforcement department for taking necessary actions against those who committed securities crimes.

The 12 companies, whose share prices were manipulated, include United Power Generation and Distribution Company Ltd, VFS Thread Dying Ltd, IPDC Finance Ltd, SS Steel Ltd, Intech Ltd, Saiham Textile Ltd, Saiham Cotton Mills Ltd, Rupali Life Insurance Ltd, Monno Ceramic Industries Ltd, Monno Jute Stafflers Ltd, Investment Corporation Ltd and the Dutch-Bangla Bank Ltd.

Mominul Islam, managing director and chief executive officer of IPDC Finance, told The Business Standard that the IPDC Finance Ltd was not involved in share trading.

"Rather, the company follows securities rules, accountability and compliance properly," he said, adding that its management was not responsible for the unusual hike in the firm's share price.

Meanwhile, the BSEC has already taken steps against Monno Ceramic Industries Ltd and Monno Jute Stafflers Ltd whose corporate director is Monno Welfare Foundation.

The Monno Welfare Foundation, as per the press release, will not be able to buy, sale, transfer and mortgage the shares of these two companies.

The commission also decided to stop trading of shares of Monno Ceramic Industries in stock exchanges' public market. From Sunday, its stock will be traded in the spot market.

In spot transaction settlement, buyers have to pay cash and sellers must hand over securities in the same trading day.

Market observers, however, believe there had been a serious illegal effort by insiders in conjunction with a bad nexus with dirty market players.

A BSEC official, seeking anonymity, told The Business Standard that there are different cases of irregularities, including securities crimes, in the market, which are proven to investigators.

The crimes are serious violation of general investors' rights and thus punishable according to the securities law, he said.