• Tuesday, Jan 21, 2020
  • Last Update : 11:59 pm

BSEC fines Al-Haj Textiles director Shamsul Tk50 lakh

  • Published at 10:31 pm November 21st, 2019
BSEC logo

The decision was made at a BSEC meeting presided over by its Chairman M Khairul Hossain on Thursday

The Bangladesh Securities and Exchange Commission (BSEC) on Thursday fined Al-Haj Textile Mills Limited’s director Shamsul Huda Tk50 lakh for violation of securities laws.

The decision was made at a BSEC meeting presided over by its Chairman M Khairul Hossain on Thursday, said official statement of the market regulator.

The commission also fined Shamsul Huda’s brokerage house ANF Management Company Limited Tk5 lakh. 

Shamsul sold shares of the company without prior declaration, breaching a number of securities rules.

The BSEC release also said that Shamsul, who is also managing director of ANF Management Company, sold 1.45 lakh shares through the brokerage house without prior declaration.

The brokerage house aided and abetted Shamsul in the malpractice.

Therefore, the commission imposed Tk5 lakh penalty on ANF Management Company.

Earlier, a BSEC investigation found that Shamsul traded almost five lakh shares of Al-Haj Textiles, dragging down the joint shareholding by the company’s directors below mandatory 30%.

At the meeting, the BSEC also approved amendment proposal of Securities and Exchange Commission (merchant banker and portfolio manager) rules, 1996 after bringing some changes to the rules.

The amended rules allow chief executive officer or managing director of a merchant bank working as issue manager to trade shares of companies other than those managed by the entity. 

Al-Haj Textile Mills incorporated as a private limited company in 1962, the company was converted to a public limited company in 1967 and listed at DSE in 1983. Its manufacturing units are located in Iswardi, Pabna.

According to the DSE data, sponsor-directors hold 12.78% of Alhaj Textile Mills share, government 0.03%, institutions 9.54% and general investors hold 77.65%.

The company's sponsor-directors do not hold at least 30% stake, as made compulsory in the securities law, in the firm. Last month, BSEC decided to trade the stocks of Al-Haj Textile Mills on the spot market due to its non-compliance of the 30% provision.

The company has a paid-up capital of Tk22 crore, and belongs to ‘A’ category of DSE.