HC restricts transfer of two co shares
Sunday, 3 October 2010
FE Report
A High Court (HC) Division bench has imposed restriction on allowing transfer of 34,65,520 shares of United Insurance Company Ltd and United Leasing Company Ltd upon a writ petition filed by three investors.
The HC division bench comprising Mamnoon Rahman and Syeda Afsar Jahan issued a rule in this regard Thursday last and directed the Securities and Exchange Commission (SEC), Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) not to accord permission to transfer 1,775096 shares of United Insurance and 1,690,424 shares of United Leasing.
Lawyers Rokunuddin Mahmud, Ahsanul Karim and Khairul Alam Choudhury on behalf of the petitioners argued that the major shareholders of United Insurance and United Leasing took initiative to transfer their shares without declaring price sensitive information surreptitiously influencing price-hike of the shares of the companies.
"Concealment of such price sensitive information is an offence liable to be prosecuted under section 22 of Securities and Exchange Ordinance 1969," the petitioners argued.
Meanwhile SEC is investigating the alleged insider trading involving share selling of two listed companies at the Dhaka Stock Exchange (DSE). "We have received such allegations from a number of investors. The issue is now under lens of the commission," SEC chairman Ziaul Haque Khondker told the FE earlier.
A number of investors have recently complained to the securities regulator and bourse, bringing allegation of insider dealing against one leasing company, one insurance company and a foreign bank.
Insider trading means buying or selling securities by a corporate officer or other insider on the basis of information that has not been made public.
According to the securities rules, no directors or entrepreneurs of listed companies is allowed share transactions without making it public.
But the two companies in league with the share-selling agent have transacted shares without disclosing, which clearly breached the securities rules, according to the complaint letter.
"I have suffered serious loss in investing on those companies' shares because of 'insider trading' by major shareholders of the companies," said an investor in his complaint letter to the securities regulator and bourses.
"The information of selling shares by the sponsor shareholders of the two listed companies was intentionally leaked in the market, causing unusual price hike of the shares. But this information of selling shares was not disclosed in line with securities rules," he said.
The letter said, "The market price of the shares of the seller companies started to go up during the time. The managements of two companies were well aware of the fact that the aforesaid companies are going to sell out their respective shares."
On September 2, the DSE asked the companies if they have any price sensitive information about the recent abnormal share-price hike. Both the companies replied negative.
A High Court (HC) Division bench has imposed restriction on allowing transfer of 34,65,520 shares of United Insurance Company Ltd and United Leasing Company Ltd upon a writ petition filed by three investors.
The HC division bench comprising Mamnoon Rahman and Syeda Afsar Jahan issued a rule in this regard Thursday last and directed the Securities and Exchange Commission (SEC), Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) not to accord permission to transfer 1,775096 shares of United Insurance and 1,690,424 shares of United Leasing.
Lawyers Rokunuddin Mahmud, Ahsanul Karim and Khairul Alam Choudhury on behalf of the petitioners argued that the major shareholders of United Insurance and United Leasing took initiative to transfer their shares without declaring price sensitive information surreptitiously influencing price-hike of the shares of the companies.
"Concealment of such price sensitive information is an offence liable to be prosecuted under section 22 of Securities and Exchange Ordinance 1969," the petitioners argued.
Meanwhile SEC is investigating the alleged insider trading involving share selling of two listed companies at the Dhaka Stock Exchange (DSE). "We have received such allegations from a number of investors. The issue is now under lens of the commission," SEC chairman Ziaul Haque Khondker told the FE earlier.
A number of investors have recently complained to the securities regulator and bourse, bringing allegation of insider dealing against one leasing company, one insurance company and a foreign bank.
Insider trading means buying or selling securities by a corporate officer or other insider on the basis of information that has not been made public.
According to the securities rules, no directors or entrepreneurs of listed companies is allowed share transactions without making it public.
But the two companies in league with the share-selling agent have transacted shares without disclosing, which clearly breached the securities rules, according to the complaint letter.
"I have suffered serious loss in investing on those companies' shares because of 'insider trading' by major shareholders of the companies," said an investor in his complaint letter to the securities regulator and bourses.
"The information of selling shares by the sponsor shareholders of the two listed companies was intentionally leaked in the market, causing unusual price hike of the shares. But this information of selling shares was not disclosed in line with securities rules," he said.
The letter said, "The market price of the shares of the seller companies started to go up during the time. The managements of two companies were well aware of the fact that the aforesaid companies are going to sell out their respective shares."
On September 2, the DSE asked the companies if they have any price sensitive information about the recent abnormal share-price hike. Both the companies replied negative.