Paramount Textile CFO, 3 investors fined Tk5.20cr for share price manipulation
The Bangladesh Securities and Exchange Commission (BSEC) has fined four persons, including the chief financial officer (CFO) of Paramount Textile, for manipulating shares of National Feed Mills.
In a separate development, the regulator fined four other investors Tk1.95 crore after it found evidence of manipulation in the shares of Zaheen Spinning Mills, Shyampur Sugar Mills, and Eastern Insurance Company.
The commission imposed the fine - which has to be paid within the next 30 working days - after an investigation by the Dhaka Stock Exchange (DSE) found evidence of influencing the share prices by the accused.
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Share manipulation of National Feed Mills
In an investigation into the abnormal rise in the share prices of National Feed Mills from 11 April to 17 May 2021, the country's premier bourse has found evidence of manipulation in the company of the food and allied sector.
During the investigation period, the price jumped by 133% from Tk15.60 to Tk36.50 for each share.
According to the commission's report, Paramount Insurance Company and its associates have influenced National Feed Mills' share prices by a series of trading through six beneficiary owner (BO) accounts.
Paramount Insurance and Mohammad Jahidul Abedin each hold two of the BO accounts while Paramount Textile Provident Fund and Paramount Textile each own one.
Paramount Textile's CFO Mohammad Jahidul Abedin has been fined Tk1.20 crore for violating securities laws.
Also, SM Motaharul Janan has been fined Tk17 lakh, AG Mahmud Tk3 crore and Saif Ullah Tk83 lakh for being involved in share manipulation of National Feed Mills.
According to the DSE report, Paramount Insurance Company and its Associates' realised gain is Tk4.20 crore and the un-realised gain is Tk3.69 crore through manipulation of shares of the feed manufacturer.
Mohammad Jahidul Abedin said at a hearing of the commission it was not understandable that the share prices will be influenced due to the purchase and sale of the National Feed Mills shares.
"I would have never bought shares like this if I knew it would influence the price. I am embarrassed and apologise for the unintentional mistake."
Meanwhile, AG Mahmud, Saif Ullah and their associates have influenced the share prices of National Feed Mills through a series of transactions. And they have secured a realised gain of Tk15.69 crore and an un-realised gain of Tk2.49 crore in this process.
They regretted the manipulation. However, the commission did not accept that and fined AG Mahmud Tk3 crore.
Zaheen Spinning shares also manipulated
Dhaka Stock Exchange has found evidence of manipulation in the shares of Zaheen Spinning Mills. Saif Ullah has been fined Tk25 lakh following the stock exchange report.
The manipulation took place between 25 November and 11 December 2019.
Saif Ullah's realised gain in this share manipulation is Tk1 crore.
In another development, the commission has fined an investor named Jasim Uddin Tk1 crore in the share manipulation of Eastern Insurance company.
The market regulator fined investor Sharmin Akhter Lovely Tk2 lakh and Nasir Uddin Tk5 lakh after receiving evidence of share manipulation of state-owned Shyampur Sugar Mills.
