BNP leader Mosaddek Ali Falu was fined Tk1crore and an individual investor Golam Mostafa Tk3 crore for their involvement with stock market scam in December in 2010 and January 2011, said securities regulator in a statement yesterday.
After investigation twice about the allegation of unusual manipulative share transaction brought by a share scam probe panel, led by Khondkar Ibrahim Khaled, the commission found that Mosaddek Ali Falu and Golam Mostafa had made massive profits by artificially influencing share prices of some issues, according to the Bangladesh Securities and Exchange Commission (BSEC).
The statement said issues manipulated by Falu are IFIC Bank Limited and Beximco Limited and by Mostafa are Eastland Insurance, Navana CNG, Olympic Industries, Union Capital, LankaBangla Finance and First Lease International.
“Moreover, they (Falu and Mostafa) inflated prices of those issues by spreading untrue and confusing appearances through their active trade and unusual share transaction,” it said.
The regulator had earlier called them for hearing to clarify the findings about them. But the clarification was not acceptable and there fines were imposed.
“Explanation given by them in hearing about share manipulation is not acceptable. That’s why, the commission has fined Falu and Mostafa,” said BSEC.
The regulator had started investigation of share scam in line with Khondkar Ibrahim Khaled 320-page report submitted to the finance minister on April 7, 2011.
The probe body made a series of recommendations and cited 15 case studies as proof of extensive market manipulation. In January 2011, a three-member committee headed by Khaled, former deputy governor of Bangladesh Bank, was formed.
On April 11, the Finance Minister said the probe report on share-market scam identified some individuals and financial institutions as the main players behind the recent stock-market crash.
The share-price index of Dhaka Stock Exchange hit 8,918.51 points, a record high, in December 2010 from 4,708 in January that year. In January 2011, the market saw a major collapse after the ’96 crash, as the bubbles burst. On one occasion, the main index of Dhaka bourse fell 600 points in just five minutes, resulting in the instant stoppage of trading.
In another decision, the commission has also fined Tk10 lakh each all directors of Sahajibazar Power Company Limited for inflating the financial statements of the company.
For similar reason, the company’s managing director also faced fine of Tk5lakh and the regulator asked its enforcement departments to take action against its chief executive officer.
