BSEC probing insider trading in Safko Spinnings’ shares

Several investors and a brokerage firm are under scanner for suspected insider trading activities and unfair trade practices in Safko Spinnings Mills Limited.

To probe the allegations, the Bangladesh Securities and Exchange Commission (BSEC) has formed a two-member inquiry committee, according to an order issued on May 11.

The probe committee has been asked to report back by 30 days.

The formation of the committee comes after receiving a report from the Dhaka Stock Exchange that Md Sajib Hossain and his associates were, directly and indirectly, involved in a series of share transactions of the company, leading to the artificial rise in share prices of Safko Spinnings.

Sajib Hossain along with Md Abdul Quddus Amin, Md Suleaman and Nurunnesa Saki actively participated in share trading of the company, according to the report.

Violating the securities rules, Sajib Hossain, Kazi Farid Hasan, Md Abul Khayer and associates also bought more than 10 per cent shares of Safko Spinnings, it said.

Shanta Securities Limited aided them to do so, which is a violation of the securities rules, said the report.

The company's share price increased 77 percent in the nine trading days between June 6 and June 17 of last year, according to the DSE.

Replying to a DSE query about the unusual price hike, the company said there was no undisclosed price-sensitive information behind the increase in price and volumes of trading shares.

As per information from the company, it incurred losses for the last two consecutive fiscal years. As it had incurred losses, the company did not pay dividends to its shareholders for the 2018-2019 and 2019-2020 fiscal years.

On Wednesday, Safko Spinnings share prices fell more than 4 per cent to Tk 21.60 on the bourse.