BSEC fines Loutful Goni, associates for irregularities

The Bangladesh Securities and Exchange Commission (BSEC) has imposed a total fine of Tk20 lakh on investor M Loutful Goni Titu and his associates for irregularities in the share trading of Karnaphuli Insurance Company. 

This action is part of BSEC's efforts to enhance transparency and curb manipulation in the capital market.

The fines are distributed as follows: Tk2.5 lakh each for Mst Shahara Jaman and Md Asfaquzzaman, Tk10 lakh for City Bank Capital Resources, and Tk1 lakh each for M Loutful Goni Titu, Lutfunnahar Begum, Md Mahmudul Hasan, Benju Khaddo Vandor (Khairul Hasan Bwnzu), and Akikunnaher. 

The fined individuals and entities must pay the fine to the commission within 30 days. 

Investigations revealed that Mst Shahara Jaman earned over Tk52 lakh, Md Asfaquzzaman gained Tk16 lakh, and City Bank Capital Resources made Tk68 lakh in capital gains through trading shares of Karnaphuli Insurance Company, all in violation of securities laws. 

The investigation also noted family connections among those involved. M Loutful Goni Titu is the brother of both Md Mahmudul Hasan and Akikunnaher, while Khairul Hasan Bwnzu is Titu's brother-in-law, and Lutfunnahar Begum is his mother.

According to the commission's investigation report, the individuals and brokerage firms involved in trading shares of Karnaphuli Insurance Company violated securities laws, resulting in losses for general investors and negatively impacting the capital market—a situation the commission deemed unacceptable.

In December 2023, the share price of Karnaphuli Insurance was Tk33.6. By February 2024, it surged to Tk60.6—an 80% increase—without any material news or justification for the rise. Since then, the share price has steadily declined, closing at Tk32 on the Dhaka Stock Exchange this Thursday.

The non-life insurer, which has been listed on the bourses since 1995, recommended a 10% cash dividend for its shareholders last year.