The Enforcement Department will now proceed with legal options against the firms, a top BSEC official has told Dhaka Tribune
Ten listed companies out of 12 that faced regulatory actions saw their share prices down in Dhaka Stock Exchange (DSE) yesterday, as spooked investors cleared their portfolio of the errant firms.
Bangladesh Securities and Exchange Commission (BSEC) in its commission meeting on Thursday sent 12 listed firms to the Enforcement Department of the BSEC for legal actions as price manipulation allegations against the firms were primarily found to be true by an inquiry committee of the commission.
The Enforcement Department will now proceed with legal options against the firms, a top BSEC official has told Dhaka Tribune.
The listed companies that faced regulatory actions are United Power Generation Company, Al-Haj Textile Mills Ltd, VFS Thread Dyeing, IPDC Finance, SS Steel, Intech Limited, Saiham Textiles, Saiham Cotton Mills, Rupali Life Insurance Company, Monno Ceramics, Monno Jute Stafflers, Investment Corporation of Bangladesh and Dutch-Bangla Bank in recent months.
United Power Generation Company’s price declined by 1.28%, VFS Thread Dyeing by 5.22%, IPDC Finance by 1.31%, SS Steel by 0.61%, Intech Limited by 1.84% and Dutch-Bangla Bank by 0.30% yesterday.
Al-Haj Textile Mills Ltd turned out to be the worst loser with its price declining by 9.9% on the day. The stock was followed by Monno Ceramic Industries that shed 8.7% while Saiham Cotton Mills 7.6%, Monno Jute Stafflers 6.24% and Saiham Textile Mills by 4.76%.
Only two companies out of the 12 saw their prices up. Shares of Rupali Life Insurance Company rose by 9.84% and Investment Corporation of Bangladesh by 2.12%.
The commission meeting also decided to send Al-Haj Textile Mills and Monno Ceramic to the 'spot' market with effect from yesterday, as they violated the securities rules. Buyers cannot buy the shares included in the spot market category in loan money, but with cash.
The investigation team found that various forms of manipulation took place during the trading of shares in the 10 companies during the recent months.
On July 21 this year, the BSEC formed the enquiry committee to find out reasons behind the continued fall in share prices of the 12 firms, detect anomalies and manipulations in the process, if any.
AFC Capital Limited chief executive officer Mahbub H Mazumder told Dhaka Tribune that everyone was on the alert after the regulatory action. Today, there was a buyer crisis in these companies, which led to the fall in their share prices, he added.
Mahbub, also a Bangladesh Merchant Bankers Association (BMBA) Executive Committee member, said: “People should invest carefully. They should stay away from investing in junk shares and avoid companies involved in price manipulation."