Seven companies witnessed a massive fall in their stock prices on Monday, as the securities regulator formed a committee to probe irregularities against them.
Following the news, panicked investors rushed to dump the shares in these companies and the units of a bond, which also came under the regulatory scanner.
On Sunday, the Bangladesh Securities and Exchange Commission (BSEC) formed the inquiry committee to look into alleged irregularities, manipulation, and corruption in the stock market.
The five-member committee led by Zai U Ahmed, founder chairman & consultant at Tera Resources International, USA, will submit the report within 60 working days.
The panel will investigate the share transfer process of Sonali Papers & Board Mills, including re-listing on the main market from OTC market and stock price manipulation.
Sonali Paper came back to the main market of the stock exchanges and started trading from July 1, 2020, after remaining 10 years in the OTC market.
Following the news, Sonali Paper's stock price plunged 9.96 per cent to close at Tk 161.9 on Monday, becoming the day's top loser.
The team will also investigate any irregularities and share price manipulation of Acme Pesticide, Coppertech Industries, Fortune Shoes, Emerald Oil Industries, Ring Shine Textile, Best Holdings and Beximco Sukuk.
In response, stock price of Acme Pesticides fell 9.28 per cent to Tk 17.6 on Monday, becoming the third highest loser at the Dhaka Stock Exchange. Acme Pesticides raised Tk 300 million from the stock market in 2021.
Stock price of Coppertech Industries also plunged 8.71 per cent to Tk 24.1 on Monday, becoming the 6th loser at the DSE. The little known company raised Tk 200 million from the stock market in 2019.
There were allegations against the company that it has fabricated financial data to get listed with the stock exchange. The allegations have prompted the Financial Reporting Council to direct the Institute of Chartered Accountants Bangladesh to investigate the matter.
Fortune Shoe's stock price also plunged 8.28 per cent to Tk 28.8 on Monday; which was the eighth highest loser at the DSE.
Fortune Shoes raised Tk 220 from the public under the fixed price method in 2016. There was widespread allegation about the price manipulation of Fortune Shoes.
The probe committee will investigate individuals involved in the manipulation of Fortune Shoes shares, including irregularities such as failure to distribute declared dividends and artificially inflating the company's share price.
Emerald Oil Industries' stock fell 8.03 per cent after the news that the panel will also probe into struggling Emerald Oil Industries. It was the day's ninth highest loser.
After Minori Bangladesh acquired Emerald Oil Company from its previous owners, there were incidents of share manipulation.
Although the Spandan brand, under the company, resumed production after the ownership change, production has now halted due to gas shortage.
The straggling Ring Shines stock also dropped 7.69 per cent to Tk 4.80 on Monday.
The panel will probe into Ring Shine Textiles' fund-raising through private and public offerings, exaggerated sales figures in annual reports, and allegations of money transfer and laundering through bank accounts.
Ring Shine Textile raised Tk 1.50 billion from the stock market in early December 2019. But after listing, it could not do business properly due to numerous irregularities.
Stock price of Best Holdings also fell 7.66 per cent to Tk 24.1 on Monday as the inquiry committee will investigate the IPO approval procedure of Best Holdings, which raised Tk 3.50 billion from the stock market under the book-building method last year.
Best Holdings is the owning company of Le Meridien Dhaka. Earlier in 2020, Best Holdings tried to raise funds from the stock market through direct listing.
Besides, Beximco Green Sukuk's price plunged 7.14 per cent to Tk 44.5 on Monday as the panel will probe into alleged irregularities to issuance of Beximco Green Sukuk.
Beximco raised Tk 30 billion through first-ever asset- backed green sukuk in 2021 for the purpose of business expansion.
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