BSEC fines Sonali Paper directors Tk20 lakh each

Infographics: TBS

The Bangladesh Securities and Exchange Commission (BSEC) has fined all directors of Sonali Paper & Board Mills, including its managing director, Tk20 lakh each for manipulating the shares of Paramount Insurance Company.

The sponsor directors are – Chairman Mohammed Younus, Managing Director Mahfuza Younus and Director Mohammed Javed Noman. 

The decision was made at a BSEC meeting on 3 December, as per a press release issued on Thursday (5 December).

In the same meeting, the commission imposed a Tk10 lakh fine on stock market investor Mahfuza Akhter and a Tk40 lakh fine on Dewan Salehin Mahmud for manipulating the price of Prime Finance First Mutual Fund shares. 

The commission also fined Monarch Holdings Tk5 lakh for investing its funds outside its core business.

Monarch Holdings was directed to withdraw its investment in Softvion Ltd and return the money. If it fails to comply within the stipulated time, a penalty of Tk10,000 per day will be imposed.

The press release stated that between 17 August and 29 September 2023, manipulative trading in the shares of Paramount Insurance took place.

This trading violated relevant securities laws, prompting the commission to fine each director of the board, including the managing director. However, independent and nominated directors are exempt from the penalty.

The fines must be paid as a personal liability, the press release noted.

According to the Dhaka Stock Exchange (DSE), on 17 August, the share price of Paramount Insurance opened at Tk42.70 each. By 19 September, the price had closed at Tk75.40, marking a 76% increase.

Available reports for FY23 showed that three sponsor-directors of Sonali Paper collectively own a 67.51% stake in the company.

Its chairman Mohammed Younus holds 13.79%, managing director Mahfuza Younus owns 13.76%, and director Mohammed Javed Noman holds 39.94%.

The remaining 32.49% stake is held by institutional investors and the general public as of October.