BSEC fines Jashim, associates Tk50 lakh for Alltex Industries' share manipulation
The securities regulator also fined Tk5 lakh to Alif Asset Management for non-compliance
The Bangladesh Securities and Exchange Commission (BSEC) has fined Tk50 lakh to a stock market investor named Md Jashim Uddin and some of his associates for manipulating shares of the Alltex Industries Ltd – a concern of Bastu Shilip Group.
Md Jashim Uddin is the president of Shikhito Bekar Kendrio Sonchoy, Chandpur Shikhito Bekar Sonchoy and five other organisations.
Listed in the stock market in 1996, Alltex Industries, a textile manufacturer and exporter, has been running on consecutive losses for the past five years.
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The company posted huge losses in the first quarter of the financial year 2021-22. But, the share price of Alltex Industries jumped by 131% to Tk23.40 from 28 June to 5 September 2021.
The Dhaka Stock Exchange (DSE) then formed a committee in September 2021 to probe the abnormal rise in the company's share prices.
The committee submitted its report in September this year after holding hearings on the data analysis and share manipulation.
According to the committee's observation, Md Jashim Uddin and a group of his associates contributed to the price increase by making a series of transactions in the shares of the company through 19 Beneficiary Owner (BO) accounts.
On 22 November, Jashim Uddin and his associates were fined Tk50 lakh for violating the Securities Act and were ordered to pay the fine to the stock market regulator within the next 30 days.
According to the investigation report, Jashim and his associates bought 39,61,760 shares and sold 41,70,814 shares of Alltex Industries from both the block and secondary market using the BO accounts.
They collectively traded 29.40% of the total trade volume and realised a capital gain of Tk1.05 crore and an unrealised gain of Tk27.27 lakh.
The investigation report also mentions that Jashim and his associates traded Alltex Industries' shares within themselves which created a false and misleading appearance of active trading of these shares.
Other associates of Jashim Uddin are JS Enterprise, Shikhito Bekar Sonchoy O Rin Dan, Bagra Shikhito Bekar Sonchoy, Chandpur Shikhito Bekar Sonchoy, Wireless Bazar Shikhito Bekar, Shikhito Bekar Kendrio Sonchoy, Chandra Shikhito Bekar Jubo, Faridganj Shikkhita Bekar Sonch, SB Amader Ponno Amader Bazar, Gridakalindia Shikkhitha Bekar, Patwary Bazar Shikkhito o Bekarsors, Shahrasti Sikkhita Bekar SRS, Matlab Shihita Bekar Sanchoy, Rupsa Shikkhitha Bekar Sonchoy, SBCL Housing, Toramnsirat Shikito Bekar Sanchoy and Md Masudur Rahman Sheikh – a brother of Jashim Uddin.
BSEC also fines Tk5 lakh to Alif Asset Management
The securities regulator has also fined Tk5 lakh to Alif Asset Management Limited for non-submission of quarterly, semi-annually and annual operational activities reports to the commission on a regular basis for June 2021.
Alif Asset Management violated BSEC's Mutual Fund Rules 2001 by not submitting regular reports.
According to the commission report, the net worth capital of Alif Asset Management is below Tk5 crores.
After a hearing in this regard, the commission instructed Alif to raise its net worth to the required amount by August 2022. But as the company failed to comply, BSEC decided to impose a penalty of Tk5 lakh.
