BSEC fines Shakib-Hiru cartel for Tk2.83cr gains by stock manipulation
A total of Tk1.63 crore in fines was handed out to seven investors, including Shakib, in share price manipulation of
The Bangladesh Securities and Exchange Commission (BSEC) has finally slapped its ousted goodwill ambassador, cricket star Shakib Al Hasan, with penalties for stock price manipulation.
Shielded for several years by former BSEC chairman Shibli Rubayat-Ul Islam, Shakib has now been fined Tk50 lakh by the reconstituted commission.
Shakib's partner Md Abul Khayer Hiru, along with two individuals and three firms connected to them, has been penalised with a total fine of Tk1.13 crore further.
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BSEC sources told The Business Standard that the shares of publicly traded non-life insurer Paramount Insurance suddenly surged from Tk41 to over Tk75 within a month during August-September last year.
In January this year, the Dhaka Stock Exchange submitted its surveillance report to the regulator, revealing the involvement of Hiru, Shakib, and their associates in manipulating the stock price.
The seven investors collectively gained Tk2.83 crore in capital, prompting the regulator to impose a fine of Tk1.63 crore as part of its effort to deter market manipulation.
According to the investigation reports, Shakib earned over Tk90 lakh in capital gains by trading more than a million shares of Paramount Insurance, violating securities laws.
Hiru realised over Tk40 lakh in profits, while Eshaal Communication earned over Tk1.32 crore, and Hiru's father Abul Kalam Matber made Tk16.79 lakh. Md Jahed Kamal and Lava Electrodes Industries gained Tk1.78 lakh and Tk1.17 lakh, respectively.
Monarch Mart Limited, a struggling e-commerce platform owned by Shakib and Hiru's family, did not realise profits from nearly 34,000 Paramount Insurance shares but had an unrealised profit of Tk1.47 lakh at the time.
Monarch, Lava, and Jahed Kamal were fined Tk1 lakh each for violating securities regulations. The largest fine, Tk75 lakh, was imposed on Eshaal Communication, followed by Shakib's Tk50 lakh, Hiru's Tk25 lakh, and his father's Tk10 lakh.
BSEC officials noted that the seven individuals formed a nexus to manipulate the stock price. Hiru, a former student of Shibli and now a government employee, reportedly became a key player in manipulating secondary market prices, allegedly under the guidance of Shibli.
Shakib, who became BSEC's goodwill ambassador in 2017 to promote its financial literacy programme, partnered with Hiru after Shibli became BSEC chairman in 2020, marking the start of their stock manipulation activities, allegedly with the regulatory chief's support.
Shakib, who was also elected a member of parliament on the Awami League ticket in January this year, held the position until the fall of Sheikh Hasina's government on 5 August amid a mass uprising.
Shibli, himself loyal to the Awami League, initially ignored allegations and investigative findings against the Hiru-Shakib cartel. However, in response to growing criticism, he imposed fines on Hiru and his associates, totalling over Tk10 crore for manipulating at least seven stocks.
Following the resignation of Shibli, the BSEC, under its new chairman Khondoker Rashed Maqsood, has taken a tougher stance on wrongdoing. Shakib and his firms were found to have been involved in manipulative stock schemes during Shibli's tenure as chairman, with Shakib finally facing penalties for the first time on Tuesday (24 September).
