The stock market regulator has fined a former managing director of IFIC Bank Tk 50 million for allowing the promotion of a bond issued by a real estate company using the bank's brand name.
Shah Alam Sarwar, former managing director of IFIC Bank, is facing the penalty for his involvement in the campaign of IFIC Aamar Bond, whose face value was Tk 15 billion and issue value was Tk 10 billion.
Although the bond was issued by Sreepur Township (STL), advertisements and promotional content used the name of IFIC Bank, giving the false impression that the bank was the issuer, the BSEC said in a report on the fine imposition made public this week.
The misrepresentation misled investors and violated core provisions of securities laws and investor protection principles, said the market regulator.
The stock market regulator has also fined three firms-Faruque Enterprise & Associates, Raiyan Trading, and Islam Enterprise-Tk 111 million in total for share price manipulation of Alif Industries.
The regulator slapped the fines on them upon completion of hearings based on investigation reports of the Dhaka Stock Exchange (DSE).
The inquiry team revealed that Alif Industries' stock shot up from Tk 75.10 to Tk 136.10 between February 5 and May 9 last year, soaring more than 82.68 per cent despite the overall market being bearish.
Alif Industries' stock closed at Tk 44.3 per share on Wednesday on the Dhaka bourse.
Analysing the relevant documents and trade patterns, the DSE team concluded that the three firms had engaged in coordinated transactions within their network and artificially inflated the stock price through serial trading, creating high demand for the shares.
They used multiple brokerage firms and several beneficiary owners' (BO) accounts to drive up the stock price.
Among the firms, Faruque Enterprise & Associates realised capital gains worth Tk 34.4 million through stock price manipulation of Alif Industries. The regulator imposed a fine of Tk 31.2 million on the firm.
Raiyan Trading earned Tk 30 million in capital gains, and the BSEC imposed a fine of Tk 27.3 million.
The inquiry team found Islam Enterprise to be the highest beneficiary, realising profits of Tk 58.1 million through stock trading of Alif Industries. It has been fined Tk 52.5 million.
The securities regulator asked them to deposit the money within 30 working days-starting from November 6 for the companies and from November 16 for the former MD of IFIC Bank.
Otherwise, the BSEC will take further action as per the securities rules.
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