Same group played key role in rise and fall of stock prices

The investigation committee on the recent stock market scam has identified one particular group of major market players who were active during both unusual rise and fall of the market. A member of the committee told the FE Friday: "At the very beginning of our investigation, we collected data from the Central Depository Bangladesh Limited (CDBL) on major sell-buy deals executed during extremely bull market. We collected data from mid-September to December 5, 2010, the day when the DGEN touched the highest ever mark at 8,918 points." The probe body collected the data relating to 50 major individuals and institutional investors who purchased the maximum number of shares at particular points. As a result, the DGEN went up abnormally. Then the probe body collected data of another 50 large investors who played key roles in pulling the market down, also abnormally -- a trend that continued up to January 20, 2011. The probe body became surprised to see that it was the same group of traders who were active during both abnormal rise and fall in stock prices. Then the probe body started to detect the BO (beneficiary owner) accounts of those major players. Among the players, the major individual traders, as per records in BO accounts, include Golam Mostofa, Abu Sadat Mohammad Sayem, Sirajuddoula, Golam Kibra, Helal Mia and Tasmi Ambari. According to probe body's findings, on a certain trading day Mr Mostofa withdrew his buy orders covering a large volume of shares 13 times to manipulate the market price of the shares of a company. The probe body member said, "It's a matter of great surprise that these persons influ enced the market by getting information from the DSE and CDBL on major sell-buy deals in shares of some specific companies having the strength to impact the market." He said by getting prior information from these two organisations, which preserve data on regular sell-buy deals, such quarters made their plan of action before the beginning of the next trading session. "That's why the probe body has brought only one allegation against the CDBL as it leaked information to the vested quarters," he said. The probe body studied 17 cases to find out manipulation occurred in the primary market. The major case studies include BD Thai, Khulna Power and Company Limited (KPCL), GMG Airlines, Chittagong Vegetables, CMC Textile and Meghna Cement. Studying such cases, the probe body identified many devices that helped the vested quarters to reap hefty profits through direct listing, book building method, distribution of placement shares, asset revaluation and window-dressed balance sheets. The probe body member said these devices increased the overall market capitalisation by 80 per cent. "The major manipulation that had occurred in the primary market played a key role behind the recent volatility of the secondary market," he said. He said, "Undoubtedly, there are many key players belonging to different political parties who manipulated the market through some big individual traders. Business interests help create a bridge between the leaders of the rival camps." "The government should form a task force to identify such masterminds," he said. However, another source said, during the submission of probe body's report, the finance minister termed a top businessman an "evil genius". According to the probe body, a group of officials in the SEC and ICB were involved in the transactions of a large volume of private placement shares. The probe body chairman and three other members signed every page of the report to help avoid its any possible doctoring.