United Airways, brokerage firm to face music

The securities regulator Tuesday imposed an aggregate amount of penalty worth Tk 14 million on 12 persons including chairman of United Airways (BD) for making profits through unlawful transaction of shares.
They were involved with market 'manipulation' and conducted share transactions before disclosing price sensitive information, according to Bangladesh Securities and Exchange Commission (BSEC).
The regulator also imposed another penalty worth Tk 4.0 million on a brokerage firm and its managing director and his wife for breaching securities rules through unlawful transactions in dealer account.
The decisions of imposing penalty were taken at a meeting held at the BSEC office.
At Tuesday's meeting, the regulator also approved the proposal of Tk 4 billion subordinated floating rated bond to be issued by AB Bank.
Seven former sponsor/directors of United Airways (BD) will have to pay a penalty worth Tk 1.0 million each as they conducted transactions during restricted period and made profits being informed of price sensitive information.
According to BSEC decision, Tofayel Ahmed Chowdhury, Md. Ashik Miah, Md. Yusuf Chowdhury, Modhurish Ali, Siddiqa Ahmed, Khandakar Mahfuzur Rahman and Tahmina Begum will have to pay a penalty worth Tk 1.0 million each.
Besides, Tasbirul Ahmed Choudhury, chairman and managing director of United Airways (BD), and Khandakar Taslima Chowdhury also conducted share transactions and made profits using price sensitive information before disclosing it. They also breached the Securities and Exchange Ordinance, 1969 being involved with market manipulation. Tasbirul Ahmed Choudhury and Khandakar Taslima will have to a penalty worth Tk 2.0 million each for their share transactions based on price sensitive information.
Some three individual investors were also involved with market manipulation through transactions of the shares of United Airways (BD). For breaching the securities rules through market manipulation, Md. Syed Sirajuddaula, Abu Sadat Md. Sayem and Yakub Ali Kandakar will have to pay a penalty of Tk 1.0 million each.
The securities regulator has also decided to issue warning letter to the United Airways (BD) for not including deferred tax liabilities in first quarterly statement of 2012. According BSEC, for not including deferred tax liabilities, the company's earnings per share (EPS) and net asset value (NAV) were over valued. "True and fair view were not reflected in the company's financial statement."
M. Securities conducted share transactions as buyer and seller through dealer account. Share transactions were also executed among the company's directors and relatives but there was no change in their ownerships. Besides, M. Securities breached the securities rules disbursing margin loans to its directors and their relatives through dealer account.
As per the BSEC decision, M. Securities will have to pay a penalty worth Tk 2.0 million, while the company's managing director Chowdhury Md. Nurul Azam and his wife Zakia Chowdhury will have to pay penalty worth Tk 1.0 million each.

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