The Bangladesh Securities and Exchange Commission (BSEC) has fined 12 individuals and 3 institutions a total of Tk 799.2 million in February for allegedly manipulating the share prices of three listed companies—Sonali Paper and Board Mills, Fine Foods, and Fortune Shoes Limited.
Those fined are: Md. Abul Khair Tk 110.1 million, Abul Kalam Matabar Tk 72.2 million, Kazi Sadia Hasan Tk 250.2 million, Kanika Afroz Tk 190.1 million, Kazi Farid Hasan Tk 35 million, Kazi Fuad Hasan Tk 35 million, DIT Cooperative Tk 50 million, Mohammad Shamsul Alam Tk 57.5 million, Mohammad Jahangir Alam Tk 1 million, Sazia Jasmine Tk 49 million, Sultana Parveen Tk 11 million, AAA Agro Enterprise Tk 75 million, Arbim Techno Tk 23 million, and Md. Farid Ahmed 1 lakh taka.
Sonali Paper
Six people have been fined 75 lakh taka for allegedly manipulating Sonali Paper’s shares. Those fined include Md. Abul Khair, Abul Kalam Matbar, Kazi Sadia Hasan, Kanika Afroz, Kazi Farid Hasan and Kazi Fuad Hasan.
A further investigation was conducted by the Dhaka Stock Exchange (DSE) from June 28 to August 5, 2021. The investigation team analyzed documents collected from various TREC holder companies related to Sonali Paper’s share transactions through random selection.
The analysis showed that Md. Abul Khair and his associates purchased 7 lakh 37 thousand 71 shares of Sonali Paper, which is 11.27 percent of the company’s total shares. During the investigation period, their capital gain stood at 72 lakh taka and the unrealized capital gain was 9 lakh 30 thousand taka.
The investigation proved that Md. Abul Khair and his associates were directly and indirectly involved in the serial trading of Sonali Paper shares.
Fine Foods
The Bangladesh Securities and Exchange Commission (BSEC) has imposed a total fine of Tk 1.96 crore on four investors and two institutions for manipulating and artificially inflating the share price of Fine Foods Limited.
Mohammad Shamsul Alam, identified as the main manipulator, has been fined Tk 3.75 crore. His brother Mohammad Jahangir Alam has been fined Tk 1 lakh and his wife Sajia Jasmine has been fined Tk 4.9 lakh. In addition, their sister Sultana Parveen has been fined Tk 1.1 lakh. These four individuals are members of the same family.
Two institutions associated with Mohammad Shamsul Alam have also been fined Tk 7.5 million. AAA Agro Enterprises, where he works as the CEO, has been fined Tk 7.5 million. On the other hand, Arbim Techno has been fined Tk 2.3 million and Mohammad Shamsul Alam is a director of the company.
The BSEC has taken this decision based on the investigation report of its surveillance department. According to the commission, during this period, the manipulators conducted multiple transactions within their network, which created a misconception among the general public that the company’s share activities were more active and in high demand even in the declining market.
They used multiple brokerage firms and several beneficial owners (BO) accounts to artificially influence the buying and selling activities. In addition, they held more than 10 percent of the company’s shares during this period without declaring them to the stock exchange or the regulatory body, which is against the law and rules.
Fortune Shoes
The regulatory body has fined four individuals and one institution a total of Tk 77.2 million for Fortune Shoes share manipulation. Among the fined are – Md. Abul Khair, Abul Kalam Matbar, Kazi Sadia Hasan, Kanika Afroz and DIT Cooperative.
The investigation was conducted between October 3 and October 26, 2021 through the Dhaka Stock Exchange (DSE). After analyzing the relevant documents, it was found that Md. Abul Khair and his associates purchased 17.1 million shares of Fortune Shoes. They traded 37.84 percent of the company’s total shares using the mentioned BO account.
During the investigation period, they realized capital gains of Tk 77.15 crore and their unrealized gains were Tk 42.38 crore. In this situation, the authorities have taken such strict action against the violators so that transparency and fairness of the stock market can be ensured in the future.
