The Bangladesh Securities and Exchange Commission (BSEC) has taken action against 10 individuals and institutions over alleged irregularities and manipulation in the trading of Taufika Foods and Lovello Ice Cream shares.

The commission has decided to impose a total fine of Tk 2.20 crore on eight individuals and two institutions for violating securities laws, according to sources. It has also decided to initiate criminal proceedings against two individuals and a company in connection with the case. A Chinese entrepreneur and another company will be issued warnings.

Those fined include Liz Fashion Industries, CBC Capital and Equity Management, HM Rubaiyat, Shayla Akter, Rajon Kumar Saha, Taslima Kanan, Md Masud Rana, Abu Sadat Md Faisal, Adiba Azad and Mohammad Arif Hossain.

The total fines amount to Tk 21.997 million.

According to the investigation, BSEC found evidence of securities law violations in Lovello Ice Cream’s share trading between January 29 and July 31, 2024.

During the period, the company’s share price surged from Tk 29.80 on January 29 to Tk 106.40 on July 15, an increase of Tk 76.60, or around 257 percent, in about five and a half months.

The commission found that the accused individuals and entities allegedly made illicit profits through collusion, violating relevant provisions of the Securities and Exchange Ordinance, 1969, a 2010 BSEC notification and the Beneficial Business Prohibition Rules, 2022.

BSEC sources said criminal proceedings have also been proposed against Lovello Ice Cream Chairman Shamima Nargis Haque, her close relative Md Zahedul Haque and family-owned Taufika Engineering Limited.

Meanwhile, Chinese entrepreneur Zhuang Lifeng and Paramount Insurance will be warned in connection with the matter.

However, BSEC Executive Director and spokesperson Abul Kalam told Agamir Shomoy that fines had been imposed on some individuals and entities over alleged manipulation of Lovello shares, but no criminal case had yet been filed. The commission’s legal department will review the matter and decide on further action.

The investigation also found the involvement of an associated group around Zhuang Lifeng, a Chinese entrepreneur involved in Bangladesh’s garment and financial sectors. His two companies, Liz Fashion Industries and CBC Capital and Equity Management, were reportedly linked to the alleged manipulation.

Dhaka University accounting professor Al-Amin said merely imposing fines could lead to delays in recovery. He said criminal cases, if pursued through proper legal procedures based on the nature and severity of the offences, would not necessarily create panic in the capital market.

He stressed that BSEC should carefully review the legal basis and relevant provisions before filing cases, warning that decisions based on weak legal grounds could undermine investor confidence.

BSEC has said it is following a “zero tolerance” policy to restore transparency in the capital market, with its Enforcement Division expected to take further action.

The latest move is being viewed as part of the commission’s broader policy of taking criminal action in serious or high-profile market manipulation cases.