Controversial stock investor Md Abul Khayer, widely known as the Hero, his father, and his entity DIT Co-Operative, bagged a big chunk of capital through the manipulation of share prices of One Bank Limited and the BDCOM Online Limited, probe reports said.
Because of these anomalies done by them, the securities regulator Bangladesh Securities and Exchange Commission (BSEC) fined them Tk3.55 crore on August 2, recent BSEC documents availed by The Business Post regarding the matter found.
According to the DSE data, One Bank’s share price surged from Tk12.6 to Tk20.1, up 59.52 per cent, from November 15 to November 30 in the last year.
Besides, BDCOM Online’s share price rose from Tk23.6 to Tk34.3, up 45 per cent from March 7 to March 10 this year.
The price hikes of these two companies seemed unusual to the authorities of the Dhaka bourse which consequently conducted separate investigations into the matters.
With an analysis of documents, DSE found that Kazi Sadia Hasan (Client Code #3898 at UCB Stock Brokerage Limited) was the top buyer of the issues of One Bank during that time.
Her identity is that she is Hero’s wife and the managing director of Monarch Holdings, whose chairman is star cricketer Shakib Al Hasan.
Besides, Hero’s father Abul Kalam Matber (client code 9166 at UCB Stock Brokerage), and Hero’s sister Konika Afroze, were among the big buyers of the private bank’s publicly-traded shares.
It was also observed that Kazi Sadia Hasan was the top seller of shares of the bank during the same time.
The above-mentioned client bought some 39,829,936 units of shares of the bank and sold off 23,356,110 units, accounting for 13.64 per cent of the total traded shares of the bank during that time.
The DSE found that Sadia Hasan with 13 more accountholders, related to her husband, collectively had traded 47.07 per cent shares of the bank during that period.
As per DSE trading data, Abul Kalam Matber and other allies of controversial investor Hero picked a total of 143,127,686 units of shares of One Bank and sold off 74,895,155 units on both public and block markets during that period.
Sadia, Matber and other Hero allies booked a capital gain of Tk14.35 crore by trading the bank’s shares during that period, the DSE investigation said.
As per section 17 of the Securities and Exchange Ordinance, 1969, no person for the purpose of inducing, dissuading, effecting, preventing or influencing, cannot get involved in the sale or purchase of any security directly or indirectly.
It is evident that Matber and others were involved directly and indirectly in a series of transactions of securities of One Bank with their beneficiary owners’ accounts with the intention to create the appearance of active trading and raise the prices of the said shares artificially.
Thus, Abul Khayer, his father and other allies, violated section 17(e)(ii) of the Securities and Exchange Ordinance, 1969, by influencing transactions of 1,075,384 shares of One Bank.
For this reason, the stock market regulator fined Abul Kalam Matber and his associates Tk3 crore.
On the other hand, DIT Co-Operative, with client code of S2116 & BOID-1604530065757811 at SBL Capital Management Limited was the 8th top buyer of shares of BDCOM Online during the period of March 7 to March 10 this year.
After scrutinising the relevant documents, DSE observed that the said client participated in the trading of shares of the company in association with total of five accounts.
On March 7, the total number of trades of BDCOM on the trading floor was only 766, while the number of trades executed by DIT Co-Operative Ltd and associates was 361, accounting for 47.13 per cent of the total trades.
Again, the total turnover of BDCOM on that day was Tk6.88 crore while the said client picked up securities worth Tk4.34 crore, accounting for more than 63 per cent of the company’s total turnover.
The DSE surveillance report found that DIT Co-Operative and associates executed significant trades during this time period, and was involved in influencing the market.
DIT Co-Operative and its associates bought a total of 13,675,740 units of security of BDCOM and sold off 5,142,990 units on both block and public markets from March 7 to March 10 with five BO accounts.
Thus, they booked a capital gain of more than Tk17 crore.
Abul Khayer Hero, on behalf of DIT Co-Operative, attended the BSEC hearing and replied, “We have analysed, summarised and then taken the decision to invest in BDCOM shares considering the development of the banking Sector.
“We had no other intention regarding the purchase of shares of the company” he also said.
He also apologised if any possible violations took place by their tradings.
However, the commission did not get convinced by his reply and consequently fined DIT Co-Operative Tk 55 lakh.
