Five fines of Tk 1.02cr for rigging the actions of Beach Hatchery in 2010
The Bangladesh Securities and Exchange Commission fined the three directors and two investors of Beach Hatchery Tk 1.02 crore for manipulating the company’s stock in 2009-10.
The BSEC recently issued four separate orders, imposing a financial penalty on them.
The stock market regulator fined Beach Hatchery directors Fahmida Islam Tk 12 lakh, Meghna Shrimp Culture Limited Tk 25 lakh and Syed Nur Ahmed Tk 5 lakh for making illicit gains by rigging prices.
Earlier on January 26, 2011, the government formed a high-level investigative committee to investigate abnormal ups and downs in the capital market. The BSEC formed another committee on December 2, 2012 for further investigation.
The committee had reviewed, analyzed and investigated data / information on the trading of shares of Beach Hatchery Limited, according to the recent ordinance.
From January 5, 2009 to December 1, 2010, the share price of the company increased from Tk 5.8 to Tk 119.10 in 23 months following the disclosure of price sensitive information.
On April 12, 2009, the company said it would acquire four steel offshore trawlers.
On May 7, 2009, the company recommended a 10 percent stock dividend for 2008.
The company had also declared a stock dividend of 12 per cent for the year 2009 and an issue of right shares at 2: 1 at an issue price of Tk 13 each (including a premium of Tk 3).
‘After the stock price surge, Managing Director Shariful Islam sold 41-15,000 shares, Director Fahmida Islam sold 5,000,000 shares, Corporate Director Meghna Shrimp Culture sold 7,25,000 shares, Nazrul Islam, a non-retired director, sold 1,848,800 shares, the Jubo Karmasangsthan Society, now retired corporate director, sold 12,32,000 shares and Syed Nur Ahmed, director, sold 5,000,000 shares of Beach Hatchery ” , indicates the order.
During this period, 72,56,800 shares of the company were sold by the directors of the company, which represents 33% of the total number of shares as of December 31, 2009, he said.
“By influencing the increase in the share price, the sponsors / directors of said company sold a large amount of shares and benefited from a higher price,” he said.
“In addition to this, Beach Hatchery has canceled the acquisition of 4 (four) steel body deep sea trawlers. But, said company did not release said PSI regarding the cancellation when selling the large amount of shares, ”he said.
The directors of the company engaged in the acquisition of four deep-sea steel trawlers as a fraud or deception, he said.
The BSEC exempted Shariful Islam from financial penalty because he died.
During Beach Hatchery’s stock prices soaring from January 5, 2009 to December 1, 2010, Mohammad Sayf Ullah, client of NBL Securities, and SM Mafidul Haque, client of Investment Promotion Services, manipulated Beach Hatchery stock prices and have made a huge capital gain.
The BSEC fined Sayf Ullah Tk 10 lakh and Mafidul Haque Tk 50 lakh for the manipulation.