21 involved in National Insurance shares manipulation

Some 21 investors, including associates of Abul Khayer Hiru, responsible for manipulating the share prices of the Bangladesh National Insurance Company Limited (BNICL) by 90% within just two months, an investigation by the Bangladesh Securities and Exchange Commission (BSEC) has found.

Among the investors implicated in the manipulation scheme are Muhiuddin Khan Alamgir, former chairman of the scandal-hit Farmers Bank (now renamed Padma Bank), and Shakib Al Hasan, the captain of the Bangladeshi national cricket team in Test and T20. The probe also revealed that Premier Bank and Paramount Insurance were involved in the share manipulation.

MK Alamgir, a former home minister and current lawmaker from Chandpur, denied any wrongdoing, stating that he was not involved in share trading and that someone may have opened a beneficiary owner (BO) account in his name.

The BSEC's investigation report found that these 21 investors created an artificial shortage of BNICL shares by engaging in serial trading among themselves, thereby inflating share prices. This kind of activity is illegal under securities law.

The commission has recently fined four individuals, including Hiru's wife Kazi Sadia Hasan, AG Mahmud, Saif Ullah, and DIT Co-Operative Limited Tk2.40 crore for manipulating BNICL shares, even though these four investors profited around Tk5 crore from the scheme.

BSEC has imposed a higher fine on these four investors, as their stake in the share manipulation was deemed to be significant. Others involved in the scheme have received lesser penalties as their involvement was found to be less significant.

How manipulation happens 

According to the BSEC probe report, from July 2020 to September 2021, the share price of BNICL increased 10 times, from Tk17 to Tk170. However, the commission only investigated the rise in share prices between October 29 and December 29, 2020. And this time its share price increased by 90%, from Tk37.3 to Tk71. However, the closing price of the company's shares on Thursday last week was Tk57.10.

During this time, Kazi Sadia Hasan, Saif Ullah, AG Mahmud, and DIT Co-Operative got involved in serial trading the BNICL shares through UCB Stock Brokerage, City Bank Capital Resources, NLI Securities, and SBL Capital Management.

By bidding high prices on circuit breakers, they created an artificial shortage of the shares and inflated the prices.

During this period, 6.70 lakh shares were traded from the BO account of MK Alamgir with BD Sunlife Securities, and around 10 lakh shares were traded from the BO account of Shakib Al Hasan with EBL Securities.

Besides, Premier Bank bought 12 lakh shares but did not sell any of them.

Meanwhile, the commission has fined Mizanur Rahman – known as "Halted Mizan" in the stock market – Tk1 lakh on charges of increasing share prices through manipulation by spreading rumours on social media platforms such as Facebook and WhatsApp.

He is known for spreading rumours from his Facebook pages about the share prices of different listed companies.

The market regulator has also fined the managing director and three directors of Appollo Ispat Complex Tk1 lakh each for failing to publish the financial report on time.