BSEC Fines 7 officials Tk25 lakh, warns 7 big investors
Bangladesh Securities and Exchange Commission (BSEC) has fined seven high officials a total of Tk25 lakh and warned seven big investors in Doreen Power Generations and Systems Limited, for manipulating share prices through serial and insider trading.
The decision was taken at a BSEC meeting presided by its chairman M Khairul Hossain on Tuesday.
Doreen Power shares shot to Tk141.40 from Tk70.60 between October 16 and November 7, 2016, prompting the regulator to launch an investigation into price manipulation. The probe body submitted their findings to BSEC recently, and the Dhaka Tribune has obtained a copy of the report.
A press release from the commission implicated the following employees of Doreen Power – Mahtab Bin Ahmed, an independent director, Chief Financial Officer (CFO) Afroz Alam, deputy general manager of Dhaka Northern Power – a subsidiary of Doreen Power – Wahiduzzaman Khan, Director (Development) Mostafa Moin’s wife, Chowdhury Farah Naz Samia, Company Secretary Masudur Rahman Bhuiya, General Manager Iqbal Hossain, and Senior General Manager Md Fazle Elahi Khan.
These officials bought shares during a prohibited period – which is a violation of securities laws.
For their violations, these officials have been fined a total of Tk25 lakh.
Moreover, five big investors and two institutional investors also violated securities laws by manipulating prices through serial trading of Doreen Power shares.
The names of these manipulators are Bishwajit Das and his associates, Yakub Ali Khandaker and associates, Md Fazlur Rahman Jamali, Anis Uddin, Md Safiqul Islam, Ifad Group (Ifad Autos Ltd and Ifad Multi Products Ltd), and Prime Islami Securities Ltd.
Although these manipulators made a considerable amount of money through this serial trading, small investors incurred massive losses. Using insider information, the manipulators bought shares at lower prices and sold them at higher prices.
By creating a misleading appearance of active trading of Doreen Power shares, which violates the Securities and Exchange Ordinance, 1969, the manipulators caused share prices to fall and other investors to sell them off.
For this violation, these investors were warned by BSEC.