BSEC fines 75 individuals, institutions Tk26cr in FY24 for violating laws, manipulating shares

The Bangladesh Securities and Exchange Commission (BSEC), the country's stock market regulator, fined 75 individual investors and institutions (listed companies and intermediaries) in the immediate past fiscal year 2023-24 on charges of violating securities laws and manipulating shares.

These actions, including imposing fines amounting to Tk26.12 crore, aimed to strengthen good governance in the market, according to a document of the BSEC.

The documents attached with some recent steps including fines and other capital market development issues were sent to the Financial Institutions Division last month.

In the documents, the BSEC said enforcement activities have been intensified to curb various irregularities in the capital market.

Some punitive measures were taken against 75 individuals and institutions, resulting in fines totalling Tk26.12 crore from July 2023 to 12 June 2024.

Of the amount, Tk7.44 crore was received from 51 individuals and institutions, and the remaining fines are in the process of being collected. However, many appealed against the regulator's verdicts.

In the order, after imposing fines, the BSEC issued a directive to deposit the fines within 30 working days. So, with the data of BSEC, some individuals and institutions did not abide by the order.

But market insiders aware of the steps say the commission fined the manipulators much less than they earned from the share manipulation.

So, for the development and to ensure good governance in the market, regulators should take punitive actions against them as they did not further engage in share manipulation, they say.   

The regulator should take proper actions, if any issuer violates securities laws, they add.

The fines

The commission fines any investors or issuer companies and intermediaries when they break securities rules, laws and regulations. 

According to its enforcement actions published on its website, during FY24, the commission fined several investors for manipulating share prices and issuer companies over non-compliance to submit financials on time.

In March this year, the BSEC fined Md Abul Khayer and his associates Tk20 lakh on a charge of violating securities laws in trading shares of Genex Infosys.

In April, Saif Ullah, a stock market investor, was fined Tk30 lakh, and AG Mahmud Tk25 lakh on a charge of manipulating shares of Index Agro Industries.

The commission fined Tk20 lakh AG Mahmud, and Motaharul Janan in May and Tk40 lakh for Saif Ullah on a charge of manipulating shares of Janata Insurance Company while Hasina Akhter was fined Tk5 lakh for the same reasons. 

Chowdhury Khaled Saifullah, then managing director of Grameen Capital Management, was fined Tk1 crore and banned for three years from the stock market, and Azad Hossain Patwary was fined Tk35 lakh. 

In December 2023, the commission fined Tk2 lakh to the managing director of Agrani Insurance Company Ltd on a charge of violation of securities laws while Holy Securities was fined Tk2 lakh and Nasir Sikder Tk1 lakh. 

In September 2023, the commission fined Tk1 crore for  Jamil Ahmed Chowdhury, a director of Banco Securities, and Mohammad Shoeb, director of Appollo Ispat Complex Limited Tk1 lakh for failure to submit financial information on time. 

Kabir Ahmed, director of Meghna Condensed Milk Industries, was fined Tk1 crore on a charge of securities rules violation, and Tk2 lakh fine was imposed on Asif Islam Khan, CEO and Md Kabirul Islam, head of finance and accounts, Md Rubel Hossain Sajib, IT in-charge of Dhanmondi Securities.  

Also, the commission fined Shifat Mahamood Abdullah, KTS Fashions, Shahnara Akhter Chowdhury and Md Abul Kashem Bhyuiyan for violating laws in trading Anlima Yarn Dyeing Limited Tk30 lakh, Tk10 lakh and Tk5 and Tk20 lakh respectively. 

In August 2023, the commission fined Tk35 lakh to Mohammad Abdul Hai for violating laws in trading JMI Syringes and Medical Devices shares. 

Intech Ltd's managing director was fined Tk1 lakh owing to failure to submit quarterly financials for March 2021. 

Also, Md Rafiqul Haque, managing director of Toyo Knitex (CEPZ) was fined Tk1 lakh for the failure to submit financials till June 2020, and Md Atiqul Haque, managing director of Toyo Spinning Mills, Tk1 lakh for the same reasons. 

In January 2024, the commission fined Kattali Textile Chairman Nasreen Hoque, and Shurid Industries Tk2 lakh.