BSEC fines a dozen manipulators Tk80cr
They manipulated share prices of three listed companies
The Bangladesh Securities and Exchange Commission (BSEC) in February imposed fines totalling Tk79.92 crore on a dozen individuals and entities on a charge of manipulating share prices in three listed companies: Sonali Paper & Board Mills, Fine Foods and Fortune Shoes Limited.
The fined parties are Md Abul Khayer (Tk11.01 crore), Abul Kalam Matber (Tk7.21 crore), Kazi Sadia Hasan (Tk25.02 crore), Konika Afroze (Tk19.01 crore), Kazi Farid Hasan (Tk35 lakh), Kazi Fuad Hasan (Tk35 lakh), DIT Co-Operative (Tk15 crore), Mohammad Shamsul Alam (Tk37.50 lakh), Mohammad Jahangir Alam (Tk1 lakh), Sajiya Jasmin (Tk49 lakh), Sultana Parvin (Tk11 lakh), AAA Agro Enterprise (Tk75 lakh), Arbim Techno (Tk23 lakh) and Md Farid Ahmed (Tk1 lakh).
Sonali Paper & Board Mills
The regulator imposed fines totalling Tk75 lakh on six persons — Md Abul Khayer, Abul Kalam Matber, Kazi Sadia Hasan, Konika Afroze, Kazi Farid Hasan and Kazi Fuad Hasan — for manipulating the shares of Sonali Paper & Board Mills.
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The investigation was conducted from 28 June to 5 August 2021 through the Dhaka Stock Exchange (DSE). The investigation team randomly examined documents collected from various TREC Holder Companies regarding the share trading of Sonali Paper & Board Mills.
After analysing the relevant documents, it was found that Md Abul Khayer and his associates purchased 7,37,071 shares of Sonali Paper. They traded 11.27% of the total trade volume of the company's shares using the mentioned BO accounts and realised a capital gain of Tk72 lakh during the investigation period. Additionally, their unrealised gain during the period was Tk9.30 lakh.
The investigation fund that Md Abul Khayer and his associates were directly and indirectly involved in a series of transactions of Sonali Paper shares to create the false appearance of active trading in the stock.
Fine Foods
The BSEC also fined four individual investors and two institutions a total of approximately Tk1.96 crore for manipulating the share price of Fine Foods Limited and artificially inflating its value.
Mohammad Shamsul Alam, identified as the main manipulator, was fined Tk37.50 lakh. His brother, Mohammad Jahangir Alam, was fined Tk1 lakh, while his wife, Sajiya Jasmin, was fined Tk49 lakh. Additionally, his sister, Sultana Parvin, was fined Tk11 lakh. These four individuals are members of the same family.
Two institutions linked to Mohammad Shamsul Alam were also penalised. AAA Agro Enterprise, where he serves as the chief executive officer, was fined Tk75 lakh, while Arbim Techno, where he is a director, was fined Tk23 lakh.
The BSEC made the decision based on an inquiry report from its surveillance department. According to the commission, the manipulators carried out a series of transactions within their network during this period, creating the false impression that the company's shares were more active and in higher demand, even in a declining market.
They artificially influenced buy-and-sell activities during this time by using multiple brokerage firms and several beneficiary owners (BO) accounts. Furthermore, during the period, they held over 10% of the company's shares without declaring it to the stock exchange or the regulator, which is a violation of regulations.
Fortune Shoes
The regulator imposed fines totalling Tk77.2 crore on four individuals and a firm — Md Abul Khayer, Abul Kalam Matber, Kazi Sadia Hasan, Konika Afroze, and DIT Co-Operative — for manipulating the shares of Fortune Shoes.
The investigation was conducted from 3 October to 26 October 2021 through the DSE.
After analysing the relevant documents, it was found that Md Abul Khayer and his associates purchased 1.71 crore shares of Fortune Shoes.
They traded 37.84% of the total trade volume of the company's shares using the mentioned BO accounts and realised a capital gain of Tk77.15 crore during the investigation period. Additionally, their unrealised gain during the period was Tk42.38 crore.
