Hiru, associates fined Tk10.89cr for share manipulation

The Bangladesh Securities and Exchange Commission (BSEC) has fined controversial stock market investor Abul Khayer Hiru and his associates a total of Tk10.89 crore for manipulating the shares of seven companies.

According to the BSEC, they gained Tk46.87 crore by their acts which violated the securities laws.

The fine is just 23% of the realised gain.

Hiru and his associates also have Tk61 crore in their Beneficiary Owners (BO) accounts as unrealised gain.

Unrealised gain becomes realised once the holdings are sold.

According to BSEC data, Abul Khayer Hiru and his associates manipulated the shares of seven companies through serial trading and holding a significant number of shares from the middle of last year to March this year. Because of this, general investors have suffered a lot.

The seven companies are – BDCOM Online, One Bank, Fortune Shoes, NRB Commercial Bank, Asia Insurance, Green Delta Insurance, and Dhaka Insurance.

According to BSEC, the prices of the seven companies were raised through manipulation by using the BO accounts of Hiru, his wife Kazi Sadia Hasan, father Abul Kalam Matber, sister Konika Afroze, brother-in-law Kazi Farid Hasan, and his companies Monarch Holding, DIT Co-operative, and Desh Ideal Trust.

The fines were imposed on the manipulators in commission meetings held from June to August this year.

In addition, BSEC sources said that nine more investigation reports have been filed against them.

This correspondent tried to speak to Abul Khayer over his mobile phone in this regard but he did not answer.

In a written reply to BSEC's notice on manipulation, Abul Khayer said, "We did not invest in the stock market for manipulation. New investments were made in some undervalued shares. And due to new investments, both the price and trading volume of shares increased."

He expressed regret if there was a violation of the securities laws.

Top executives at several brokerage firms and merchant banks said that in 2021, Hiru's entire family together traded shares worth around Tk8,000 crore. Hiru and his associates have made hundreds of millions of taka by using all the methods of manipulation in the market. Because of them, many investors have lost capital.

In that context, the securities regulator has slapped just a nominal fine on him and his associates. Manipulators will get more inspiration from this, the officials added.

According to them, the fine is not enough for the manipulators. Rather, they should be prosecuted for foul play.

Abul Khayer is a deputy registrar at the Department of Cooperatives. He joined the post after qualifying for the 31st Bangladesh Civil Service (BCS) exam.

He was completely unknown in the stock market before 2020. In mid-2020, his name first came to the fore following the abnormal jump in the insurance share prices, especially shares of the general insurance companies.

Hiru basically invested the funds of the Cooperative Department in the stock market, which reportedly earned him a lot.