Nine companies, three individuals fined

The securities regulator has imposed an aggregate amount penalty worth Tk 46.5 million on nine companies and three individuals for their involvement in creating 'artificial' demand for the shares of Shahjibazar Power Company Limited (SPCL), officials said.

The regulator will also file cases against three individuals and a company with the 'Special Tribunal' for their alleged involvement behind the abnormal price hike of the shares of the SPCL.
The decisions were taken at a commission meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC) Tuesday.
The BSEC said the price of the SPCL rose abnormally as some of companies, which have been penalised, created an 'artificial' demand directly and indirectly by purchasing shares through their own companies and sister concerns.
"A crisis for the shares of the SPCL was created in the market due to the role played by the companies and their sister concerns and consequently the company's share price rose," said the securities regulator.
At an urgent meeting held on November 18 last, the BSEC shifted the transaction of shares of the SPCL on spot market declaring the security non-marginable to contain abnormal price hike.
The regulator then also asked all the brokerage firms to submit the SPCL share transaction details on daily basis to the stock exchange.
As of November 18, the share price of SPCL increased by 1,233 per cent or Tk 313 from its issue price of Tk 25 since its debut on July 15 last despite all regulatory measures.
As per the regulatory decision, Prime Islami Securities Limited (PISL) will have to pay a penalty worth Tk 25 million, whereas PFI Securities will have to pay a penalty of Tk 15 million, Prime Finance Capital Management Tk 2.0 million, AIBL Tk 0.1 million, Sharp Securities Tk 0.2 million, BLI Capital Tk 0.1 million, GETCO Telecommunication Tk 0.5 million and LIBRA Trading Corporation Tk. 0.2 million.
Each director of the Petromax Refinery, a subsidiary of the SPCL, will have to pay a penalty worth Tk 1.0 million and its managing director has also been penalised Tk 0.5 million.
According to the BSEC, the PISL breached the securities rules by purchasing the shares of the SPCL beyond the stipulated limit.
The PISL also did not execute the buy orders placed by its clients and provided margin loans to its clients by crossing limit.
The securities regulator has also decided to file cases against Abul Kalam Eajdani, Golam Mostofa, Mrs Nasima Akter Lata and Star Share Bazar with the Special Tribunal of the capital market.
"Those three individuals and Star Share Bazar created artificial crisis by purchasing and holding huge volume of shares of the SPCL. Mr. Eajdani also provided false information regarding the maintenance of BO account with the securities regulator," the BSEC said.
The regulator has imposed a penalty worth 0.3 million on the chief financial officer (CFO) of the SPCL as Bangladesh Accounting Standard was not followed while calculating the company's Deferred Revenue Expenditure.
Earlier, the regulator fined the directors of SPCL Tk 1.0 million each along with imposing a penalty of Tk 0.5 million on the company's managing director for giving false information in the company's un-audited third quarter report.
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