The Bangladesh Securities and Exchange Commission (BSEC) has directed the Dhaka Stock Exchange (DSE) to investigate the unusual rise in the share price and suspicious trading of Saiham Textile Mills.

The regulator has asked the DSE to determine whether there was any market manipulation, insider trading or other violation of securities laws and submit a report within 30 working days.

The BSEC Surveillance Department recently issued the instruction to the DSE, asking it to examine the reasons behind the abnormal increase in the company’s share price and trading volume.

The investigation will also cover the roles of relevant investors, brokerage firms and authorised representatives involved in trading the shares.

BSEC Executive Director and spokesperson Mohammad Abul Kalam said the commission had noticed unusual movements in Saiham Textile’s share price and trading activity.

“The situation does not appear normal. Therefore, the DSE has been instructed to investigate the matter to determine the actual reasons. If any irregularities are found, action will be taken in accordance with the law,” he said.

According to DSE data, Saiham Textile’s share price stood at Tk 17.80 on June 8. It rose to Tk 38.20 on September 2, an increase of Tk 20.40, or 114.61%, in less than three months. The price has since declined somewhat.

The BSEC has specifically asked the DSE to examine whether investors engaged in coordinated manipulative trading involving Saiham Textile shares. It also wants to determine whether insider trading took place through the use of undisclosed price-sensitive information.

The investigation will further examine whether stockbrokers, dealers and authorised representatives properly complied with margin-related regulations and BSEC directives.

The DSE has also been asked to determine whether any failure or negligence by market intermediaries contributed to the failure to identify or prevent suspicious transactions.

In addition, the exchange must examine whether any other provisions of securities laws were violated and submit a comprehensive report to the commission.

Professor Al-Amin of the Department of Accounting at the University of Dhaka said unusual increases in a company’s share price without clear fundamental changes or price-sensitive information should be investigated.

“Such incidents expose ordinary investors to the risk of losses. Therefore, it is important to complete the investigation quickly and identify the actual reasons behind the unusual price movement,” he said.