BM Desk : Abul Khair, Md. Hiru, a Department of Cooperatives official, and his colleagues have been penalized once more for manipulating the stock price of Crystal Insurance, a publicly traded firm. The fine amount this time was 2 crore 46 lakh taka.
Hiru and his family members have received multiple fines for their role in manipulating stock prices over the past five years. However, the fine was always minor in comparison to the illicit stock market profits, therefore this punishment did not stop him from committing the same crime.
As per the report from the BSEC Enforcement Department, Hiru and his associates have achieved a realized gain of 2 crore 36 lakh taka through their trading of Crystal Insurance shares, alongside an unrealized gain of 7 crore 5 lakh taka.
In the context of the stock market, realized gains are defined as the profits obtained after shares are sold, whereas unrealized gains represent the value of shares that have been purchased and are currently trading at a higher market price, which can be sold for profit.
Abul Khair Hiru, along with the former chairman of the Bangladesh Securities and Exchange Commission (BSEC), Professor Shibli Rubayat-ul-Islam, were prominent investors in the stock market during their respective tenures. Hiru was recognized as a significant market manipulator at that time. Market sources indicate that whenever he purchased shares, the prices would surge dramatically.
The family of Abul Khair Hiru, including his father Abul Kalam Matabar, his wife Kazi Sadia Hasan, other relatives, his business partner cricketer Shakib Al Hasan, and four family-run companies—Eshal Communication, Monarch Mart, Monarch Express, and Lava Electrodes Industries—have all faced penalties.
Currently, the BSEC has levied fines against them following the conclusion of hearings based on the investigation report provided by the Dhaka Stock Exchange (DSE). The DSE’s investigation has uncovered fraudulent activities carried out by Abul Khair Hiru and his associates.
The DSE investigation team analyzed the price trends of Crystal Insurance on the primary stock exchange from July 16, 2023, to September 12, 2023. Over this two-month period, the stock price increased by over 107 percent, rising from Tk 44.20 per share to Tk 85.40 per share.
Earlier this month, the enforcement division of the securities regulator released reports detailing the fines imposed on the BSEC website. An investigation by the DSE uncovered that Abul Khair Hiru and his family were engaged in serial trading within their network, which involved successive transactions that artificially raised the price of the insurance company’s shares, creating a misleading perception of high demand for these shares, even during a bearish market.
The manipulators utilized various brokerage houses and beneficial owner (BO) accounts to carry out transactions within their network. This led to a deceptive impression of high demand for the shares among general investors, despite the bearish market conditions. Such actions have disrupted the normal trading system and breached stock market regulations.
The BSEC has imposed fines on several individuals: Kanika Afroz has been fined Tk 59 lakh, Md. Abul Khair Hiru Tk 37 lakh, Kazi Sadia Hasan Tk 13 lakh, Abul Kalam Matbar Tk 3 lakh, Shakib Al Hasan Tk 3 lakh, Humayun Kabir Tk 3 lakh, Md. Zahed Kamal Tk 2 lakh, and Md. Ashfaquzzaman Tk 1 lakh.
Additionally, Eshal Communication has been fined Tk 85 lakh, Monarch Express Tk 22 lakh, Monarch Mart Tk 15 lakh, and Lava Electrodes Industries Tk 3 lakh. These companies were also implicated in the price manipulation of Crystal Insurance shares.
Khair Hiroo, who serves as the Deputy Registrar of the Cooperatives Department, traded shares not only from his own portfolio but also from other Beneficial Owners (BO) accounts registered under the names of his relatives, family members, and social organizations. He personally manages all these accounts.
As per BSEC sources, he has faced fines multiple times for manipulating over 25 companies to date. The newly established Securities Commission, in December of the previous year, fined Abul Khair Hiroo and his family members Tk 135 crore for artificially inflating the share prices of four companies between June and October 2021.
