15 firms, 4 individuals fined Tk1.82cr for Alltex share manipulation
The Bangladesh Securities and Exchange Commission (BSEC) has fined 15 private firms and four individuals Tk1.82 crore for manipulating the shares of Alltex Industries Ltd – a concern of the Bastu Shilpi Group.
The BSEC made this decision in a commission meeting in the first week of February, and it is expected to issue letters regarding this very soon, an official familiar with the development told The Business Standard on the condition of anonymity.
The company's shares closed at Tk13.80 on the Dhaka Stock Exchange (DSE) yesterday.
BSEC fined Md Jashim Uddin Tk1 lakh, Debarata Sarker Tk3 lakh, Masudur Rahman Sheikh Tk1 lakh, and Shajalal Al Safi Tk1 lakh.
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Jashim is the president of Shikhito Bekar Kendrio Sonchoy, Chandpur Shikhito Bekar Sonchoy, and five other organisations.
The remaining fine was imposed on Jashim Uddin's associated firms, which include JS Enterprise, Shikhito Bekar Sonchoy O Rin Dan, Bagra Shikhito Bekar Sonchoy, Chandpur Shikhito Bekar Sonchoy, Wireless Bazar Shikhito Bekar, Shikhito Bekar Kendrio Sonchoy, Chandra Shikhito Bekar Jubo, Faridganj Shikhito Bekar Sonchoy, SB Amader Ponno Amader Bazar, Gridakalindia Shikhito Bekar, Patwary Bazar Shikhito O Bekar Sonchoy, Shahrasti Shikhito Bekar SRS, Matlab Shikhito Bekar Sonchoy, Rupsa Shikhito Bekar Sonchoy, SBCL Housing, and Toramnsirat Shikhito Bekar Sonchoy.
According to the commission, the manipulation took place between 17 December 2021 and 22 March 2022, during which the share price of the company rose by approximately 62% without valid reasons.
Earlier, in September 2021, the DSE formed a committee to investigate the unusual rise in the company's share prices. The committee submitted its report in September 2022 after conducting data analysis and holding hearings on share manipulation.
According to the committee's findings, Md Jashim Uddin and a group of his associates contributed to the price increase by making a series of transactions in the company's shares through two dozen Beneficiary Owner (BO) accounts.
The investigation report also mentioned that Jashim and his associates traded Alltex Industries' shares among themselves, creating a false and misleading appearance of active trading.
In December last year, Sonali Bank decided to sell the mortgaged assets of Alltex Industries through an auction to recover outstanding loans from the listed textile manufacturer.
Alltex Industries owes Sonali Bank around Tk380.77 crore as of 31 March 2022, according to a notice from the state-run bank. To recover the funds, the bank planned to auction 14.7 acres of Alltex's land, its manufacturing facilities and offices, raw materials, and spare parts, all of which were mortgaged for the loan.
Meanwhile, on 24 October 2024, the securities regulator formed a three-member committee to investigate the financials and overall business operations of Alltex Industries.
According to the qualified opinion of the auditor, the company did not charge interest on its loan from Sonali Bank for the fiscal 2023-24. The loan sanction letter specifies an interest rate of 10%, which, if charged, would amount to approximately Tk26 crore. The failure to charge this interest resulted in an overstatement of the company's profit before tax.
The company's auditor issued a qualified opinion in their report, highlighting material discrepancies in the financial statements. The auditor noted that while the company's books showed a loan balance of Tk228 crore owed to Sonali Bank, the bank's records indicated the amount was Tk261 crore.
In the October to December quarter of the current fiscal year, Alltex Industries reported a loss of Tk28 lakh, compared to a loss of Tk1.40 crore in the same period of the previous fiscal year. The per-share loss for the company stood at Tk0.05, and its net asset value per share was Tk19.86 as of the end of December 2024.
As of 31 January 2025, the sponsors and directors jointly hold 38.35% of the company's shares, institutional investors hold 10.50%, and general investors hold 51.15%.
