Sea Pearl Beach Resort subjected to probe into price volatility

The stock market regulator has formed a two-member committee to find out any possible price manipulation of shares of the travel & leisure sector company --- Sea Pearl Beach Resort & Spa.
The Bangladesh Securities and Exchange Commission (BSEC) seeks to learn if any individual, stock broker, stock dealer, institution or any insider of the company were involved in price manipulation of the stock.
In an order issued on August 23, the committee was asked to submit a report on its findings to the BSEC within 60 working days.
The regulatory move came after a recent media report.
Sea Pearl, a five star resort & hotel, was listed in 2019 under the fixed price method.
The stock traded at prices below Tk 50 each share until July last year. The company once struggled to pay its bondholder Investment Corporation of Bangladesh (ICB) for a slowdown in business during the pandemic.
The stock started climbing up from the end of July last year and jumped 627 per cent to peak at Tk 320 on March 9 this year.
The stock soared at a time when investors were suffering from a confidence crisis amid economic adversities ushered in by the Russia-Ukraine war.
The media report alleged that some eight brokerage houses and 50 BO accounts had been involved in price manipulation.
A group of investors first created a demand for Sea Pearl shares by spreading rumors. Then they started selloffs of their holdings, driving down the price.
The stock fell 43 per cent from its peak to close at Tk 182 on Sunday.
Mohammad Rezaul Karim, spokesperson & executive director of the BSEC, told the FE that the high price volatility instigated the formation of an inquiry committee to find out any possible price manipulation.
"If the probe committee finds any irregularities, the commission will take punitive actions against the persons responsible," Mr Karim said.
The company secretary of Sea Pearl, Md Azaharul Mamun said they did not have any undisclosed price sensitive information.
As the pandemic waned, the company was able to generate good revenue for a surge of visitors, full-fledged operation of its water park and cruise ship, said Mr Mamun.
In the first nine months of FY23, the company's net profit jumped 520 per cent year-on-year to Tk 800 million through March this year.

farhan.fardaus@gmail.com