The securities regulator has imposed penalties on seven individuals and companies, including cricketer Shakib Al Hasan, for their role in manipulating the share price of Paramount Insurance Company.
At a meeting on Tuesday, the Bangladesh Securities and Exchange Commission (BSEC) decided to fine them based on an investigation report and further inquiries made by the enforcement department of the securities regulator. BSEC Chairman Khondoker Rashed Maqsood presided over the meeting.
Cricketer Shakib Al Hasan, who is also a former lawmaker, was fined Tk 5 million.
Besides, an aggregate fine of Tk 1.12 billion was slapped on three other companies and three individuals, including Shakib's business partner and controversial market player Md Abul Khayer. He was fined Tk 2.5 million.
The others include Shakib's company Monarch Mart, Abul Khayer's father Abul Kalam Matber, Eshaal Communication, Lava Electrodes Industries and Zahed Kamal.
Shakib's investments had previously come under regulatory scrutiny alongside other market participants, including Khayer. However, earlier commissions had exempted Shakib, who also served as a goodwill ambassador for the BSEC, from penalties.
In September 2022, Shakib was cleared of charges related to share price manipulation after the then BSEC commission concluded that his involvement could not be proven eventually.
The latest investigation conducted by the Dhaka bourse revealed Shakib, Khayer, and their associates manipulated the share price of Paramount Insurance between August 17 and September 19, 2023.
They directly and indirectly influenced the company's share price through a series of transactions. They executed a series of transactions that created a false and misleading appearance of active trading in that security, according to the investigation.
The share price of Paramount Insurance surged from Tk 40.80 on August 16 to Tk 77.10 on September 18, 2023, marking an 89 per cent increase due to the manipulation orchestrated by Shakib, Khayer and others.
During the previous AL regime, the controversial investor Abul Khayer and Shakib allegedly influenced the share price of several other listed companies. And the regulator several times imposed a penalty on Abul Khayer based on investigation reports submitted by Dhaka bourse.
Shakib's name had also appeared on the list of investors involved in significant transactions affecting share price movements, yet the regulator had refrained from taking action against him due to his status as a goodwill ambassador.
At that time, in response to inquiries from journalists, the securities regulator defended Shakib, saying that his inclusion in the list of suspects was part of the investigation process, and that not all individuals listed were involved in manipulation. Consequently, no action was taken against Shakib as his involvement was not proved.
The then president of the Bangladesh Cricket Board reportedly expressed shock upon hearing of Shakib's alleged involvement in price manipulation. Following a political regime change, the new commission cancelled Shakib's appointment as the BSEC goodwill ambassador on August 28.
In 2017, the BSEC appointed Shakib as a goodwill ambassador in line with recommendations from the International Organization of Securities Commissions (IOSCO), which advocates for the appointment of prominent figures to enhance the image of securities markets and inspire investor confidence.
At Tuesday's meeting, the BSEC fined Eshall Communication Tk 7.5 million, Monarch Mart Tk 0.1 million, Abul Kalam Matber Tk 1 million, Lava Electrodes Industries Tk 0.1 million and Md. Zahed Kalam Tk 0.1 million for their involvement in manipulating the share price of Paramount Insurance.
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