The Bangladesh Securities and Exchange Commission (BSEC) is enforcing strict measures against share manipulation syndicates with a zero-tolerance policy. The kingpins involved in share manipulation are now facing the repercussions.
Manipulation syndicates had a strong grip on the stock market over the last 15 years of the Hasina government. Due to inadequate supervision and the lack of punitive actions by regulatory bodies, many investors suffered significant financial losses and were left in ruin. Now, the BSEC has taken a strong stance against these syndicates.
Those concerned say that before August 5, no action was taken against the stock market syndicates; instead, they were encouraged. This created a crisis of trust. Despite committing large-scale irregularities and siphoning off hundreds of crores of taka, the BSEC imposed only nominal fines.
In 2022, the BSEC fined only 21 crore taka for manipulating the prices of certain shares, while the manipulators had pocketed 253 crore taka. In 2023, a fine of 2 crore taka was imposed for price manipulation, even though the manipulators had earned 15 crore taka in profit.
The same trend has continued over the past 15 years. Before 2021, only a handful of companies were caught manipulating share prices, but by 2022, more than 15 companies faced such allegations.
The regulatory authority received accusations against officials of Universal Financial Solutions (UFS) for misappropriating nearly 180 crore taka from a mutual fund. The investigation continued for over four months, but by then, the fraudsters had fled the country.However, in the changed circumstances, the BSEC has now adopted a zero-tolerance stance to catch this syndicate. In this regard, Abul Khayer, the Deputy Registrar of the Cooperative Department and known as a 'hero' in the stock market, was recently fined over 134 crore taka for his role in share scheming.
Hero, the main architect of the share manipulation scheme, along with his wife Kazi Sadia Hasan, father Abul Kalam Matber, mother Aleya Begum, sister Kanika Afroz, brother Mohammad Basar, Sajid Matber, Sadia Hasan's brothers Kazi Fuad Hasan and Kazi Farid Hasan, and Hero's companies DIT Cooperative and Monarch Holdings, have been collectively fined a total of 134 crore 54 lakh taka.
In November, the BSEC imposed a hefty fine of 428 crore 7 lakh taka on nine individuals and organizations for their involvement in manipulating the share transactions of the Beximco Group. This marks the largest fine ever imposed for market manipulation in the nation's stock market history. The owner of the company is Salman F. Rahman, a highly criticized businessman and the former Prime Minister Sheikh Hasina's private sector and investment advisor.
Additionally, Marzana Rahman was fined 30 crore, Trade Next International 4 crore 1 lakh, Mushfiqur Rahman 125 crore, Mamatazur Rahman 58 crore, Jupiter Business 22 crore 50 lakh, Apollo Trading 15 crore 1 lakh, ART International 70 crore, Abdur Rauf 31 crore, and Crescent 73 crore taka. The accused were involved in irregular share trading of the company over a span of seven months and ten days, from July 28, 2021, to March 10, 2022.
The BSEC has decided to inspect nine additional companies. The investigation will look into how these companies have used the funds raised through IPOs in the stock market. The companies being investigated include Bangladesh Shipping Corporation, Best Holdings, Index Agro Industries, JMI Hospital, Lub-rref (Bangladesh), Navana Pharmaceuticals, Ring Shine Textile, Sikdar Insurance Company, and Silva Pharmaceuticals.
BSEC spokesperson Rezaul Karim informed Bangladesh Protidin, "We are taking the necessary steps to build a stable stock market. We have strict surveillance over all kinds of abnormal transactions. If we find evidence of any irregularities or manipulation, the BSEC will take strict punitive action."
Saiful Islam, the President of the Brokerage Association (DBA), stated, "Over the last 15 years, the BSEC has failed to take meaningful action. Following the stock market crash of 2009-2010, millions of investors lost their investments and were left financially ruined. Several institutions that offered margin loans for stock purchases went bankrupt. Since then, the market has not improved, causing millions of investors to face repeated losses and eventually exit the market. It is crucial that strong action is now taken against these manipulation syndicates."
Bd-pratidin English/ Translated by Afia Nanjiba Ibnat
