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BSEC fines firms, operators for market irregularities

Published : Friday, 31 July, 2020 at 12:00 AM  Count : 141
Business Correspondent

Bangladesh Securities and Exchange Commission (BSEC) has sent a strong message of disciplinary action against people violating stock market rules and resorting to manifolds irregularities.
Multiple individuals and organizations have been fined before Eid holidays on Wednesday for irregularities while others were warned including the state-owned Investment Corporation of Bangladesh (ICB) for breach of business rules.
These actions were approved in a board meeting of the regulatory body headed by its newly appointed chairman Professor Shibli Rubaiyat-ul-Islam.
Since the new chairman takes over BSEC has taken several positive steps to curb internal irregularities and market insiders said if such actions continues it would positively impact investors confidence and  bounce back market.
But many wonder whether he will be able to destroy the bastion of the powerful syndicates regularly manipulating the market under political shelter. Many believe the former BSEC chairman has purportedly protected interest of such quarters to cause unabated run in the bourse.    
Under the latest BSEC action directors of C&A Textiles and Tung Hai Knitting and Dyeing (excluding individual directors) have been fined Tk10 million each for violating the law.
The two companies did not submit monthly shareholding reports from August 2016 to August 2017 and they also ignored reminder from Dhaka Stock Exchange. Later the company's factory was inspected by the Dhaka Stock Exchange and it was locked.
Directors of the two companies were also summoned by BSEC for hearing but they did not appear.
IN another action Tk140 million fines were imposed for selling shares without declaration by the managing director and director of Bangladesh Shoe Industries of C&A Textiles. They made a profit of Tk 69 million, Tk 38 million and Tk 15.9 million respectively.
Rukhsana Morshed, managing director of C&A Textiles, was fined Tk 60 million, Sharmin Akter Lovely Tk 40 million and Bangladesh Shoe Industries Tk 20 million for breach of rules.
BBS Cables, a listed company, concealed information of buying machineries from a company owned by one of its director when it came to the initial public offering (IPO). The auditor and the two issue managers even issued 'due diligence certificates' in secret.
Each director of BBS has been fined Tk 0.5 million (excluding individual directors). A fine of Tk0.5 million was imposed on auditor Ahmed Zakir & Co. and IPO issue manager Banco Finance and Investment and ICB Capital Management also has been imposed. One broker fined, 8 others warned
Salta Capital has been fined Tk 5 million for diverting investors' money for their own use. Habibur Rahman Securities has been warned about shortfall customer account while it provided loan facility to officers of its own organization and margin facility in the cash account.
Kazi Firoz Rashid Securities Limited has been warned for irregularities in opening BO account in the name of an authorized representative of his own organization.
Sinha Securities, Fakhrul Islam Securities, ANF Management Company, Commerce Bank Securities and Investment, PHP Stocks and Securities have been also warned for failing to submit the net capital balance report in time.

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