The securities regulator has imposed fines totaling Tk 35.55 million on 12 individuals for manipulating the stock of Safko Spinning Mills Limited.
The action has been taken based on the findings of a probe that concluded four years after the alleged misconduct.
According to the investigation, between May 2 and June 20 of 2021, the accused colluded to artificially inflate the company's share price through a series of trades, generating significant profits.
During this one month and 18-day period, the stock price surged from Tk 10 to Tk 31.50 per share, an increase of around 215 percent.
The BSEC probe revealed that the group deliberately created an artificial market by tradingshares among themselves, misleading ordinary investors. The commission described the violations as intentional and unlawful, causing losses for general shareholders.
Such activities breached the Securities and Exchange Ordinance, 1969, and related regulations. Accordingly, under Section 22 of the Ordinance, the commission imposed the fines and directed the accused to deposit the money within 30 days via bank draft or pay order, failing which further legal action will follow.
Safko Spinning Mills, listed in 2000, is currently a 'Z' category company with a paid-up capital of Tk 299.82 million and about 29.98 million shares. As of July 31, sponsors and directors jointly hold a 30 percent stake, while institutional investors have 9.37 percent shares, and general investors 60.63 percent.
For the financial year ending June 2022, the company declared only a 2 percent cash dividend, and no dividends have been declared since.
On Tuesday, thestock closed at Tk 14.30 each share on the Dhaka bourse.
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