Allegation of insider trading against Pharma Aids
FE Report | Saturday, 5 March 2011
FE Report
The Securities and Exchange Commission (SEC), the securities regulator has issued show-cause cum hearing notice on Md. Abu Taher, AGM of Pharma Aids, a pharmaceuticals and chemicals company for violation of rule. According to the DSE website, SEC served the notice Thursday to Mr. Md. Abu Taher, AGM of Pharma Aids Ltd, for violation of Rule 4(2) of Securities and Exchange Commission (Prohibition of Insider Trading) Rules, 1995 in connection with unusual trading in shares of Pharma Aids Ltd. "Pharma Aids violated law and increased its share price abnormally by insider trading. For this, the company official has been summoned to attend the hearing," SEC sources said. However, the hearing date was not known immediately. On October 28, last year, Pharma Aids announced 30 per cent cash and 500 per cent stock (five bonus shares against one existing share) dividends for the year that ended on June 30, 2010. The stock price of the company skyrocketed after a suspicious dividend declaration. As there was no price limit on the trading of Pharma Aids shares on that day following the corporate declaration, price of each share skyrocketed by Tk 11,616, before closing at Tk 18,580. The suspicious dividend declaration by the board of directors of the pharmaceuticals and chemicals company has caused the jump in its share prices. The market watchdog suspended the share trading of the company from November 1, 2010. The SEC also formed a two-member probe committee to investigate into the abnormal hike. The market watchdog asked the committee, headed by SEC Director Md Hasan Mahmud. After that from December 5, 2010, SEC allowed share trading of the company. According to the DSE, the company was disbursing only cash dividends since 2004, but never announced bonus or stock dividend since then.
The Securities and Exchange Commission (SEC), the securities regulator has issued show-cause cum hearing notice on Md. Abu Taher, AGM of Pharma Aids, a pharmaceuticals and chemicals company for violation of rule. According to the DSE website, SEC served the notice Thursday to Mr. Md. Abu Taher, AGM of Pharma Aids Ltd, for violation of Rule 4(2) of Securities and Exchange Commission (Prohibition of Insider Trading) Rules, 1995 in connection with unusual trading in shares of Pharma Aids Ltd. "Pharma Aids violated law and increased its share price abnormally by insider trading. For this, the company official has been summoned to attend the hearing," SEC sources said. However, the hearing date was not known immediately. On October 28, last year, Pharma Aids announced 30 per cent cash and 500 per cent stock (five bonus shares against one existing share) dividends for the year that ended on June 30, 2010. The stock price of the company skyrocketed after a suspicious dividend declaration. As there was no price limit on the trading of Pharma Aids shares on that day following the corporate declaration, price of each share skyrocketed by Tk 11,616, before closing at Tk 18,580. The suspicious dividend declaration by the board of directors of the pharmaceuticals and chemicals company has caused the jump in its share prices. The market watchdog suspended the share trading of the company from November 1, 2010. The SEC also formed a two-member probe committee to investigate into the abnormal hike. The market watchdog asked the committee, headed by SEC Director Md Hasan Mahmud. After that from December 5, 2010, SEC allowed share trading of the company. According to the DSE, the company was disbursing only cash dividends since 2004, but never announced bonus or stock dividend since then.