Cvo Share Price Hike
BDBL, m-bank, broker get ‘lenient’ punishment
Bangladesh Securities and Exchange Commission fined three firms — Bangladesh Development Bank Limited, Prime Finance Capital Management and PFI Securities — with ‘nominal amount’ in connation with CVO Petrochemical Refinery’s unusual price hike.
The BSEC took the move at a regular commission meeting presided over by its chairman M Khairul Hossain.
The commission imposed the fine as the organisations violated different securities related rules in trading CVO’s shares, a BSEC release said.
The release said that Bangladesh Development Bank was fined Tk 10 lakh as the organisation played significant role behind CVO’s unusual price hike, violating Section 17 (e) (v) of Securities and Exchange Ordinance-1969.
Prime Finance Capital Management and PFI Securities were fined Tk 7 lakh and Tk 5 lakh respectively as the organisations tried to influence share prices of CVO by trading shares from different accounts at the same time without changing
beneficiary owner account.
Through the transactions the Prime Finance Management and PFI Securities violated Section 17(e) (iii) and 17(e) (v) of Securities and Exchange Ordinance-1969, the release said.
A Dhaka Stock Exchange senior officer told New Age, ‘The fine amount considering the organisations’ crime is unacceptable and inconsistent.’
The fine amount could be treated as a reward not punishment, the DSE official said.
‘As per the investigation which was conducted by the BSEC the organisations had tried to skyrocket the CVO’s share prices and intended to make profit of around Tk 100 crore,’ he said.
He also said that this type of nominal amount of fine would encourage the perpetrators to do it again rather than discourage them.
The BSEC also decided to conduct a special audit on CVO Petrochemical Refinery, the BSEC release said.
The DSE by the first week of October submitted an investigation report which showed that that CVO transferred at least 1.40 lakh shares worth Tk 12.27 crore to an individual on a written instruction of its chairman Shamsul Alam Shamim.
Delower Hossain, a client of Lanakabangla Securities under client code G1823, in 2011 and 2012 got 1.40 lakh bonus shares of CVO Petrochemical without holding any shares of the company on the respective record dates in the years.
The DSE investigation report also showed Delower received bonus shares of CVO Petrochemical twice in 2010, 2011 and 2012.
CVO Petrochemical’s shares were traded at Tk 89.6 each in April, but the price rocketed to Tk 634.7 by the end of August despite the company’s announcement that there was no price sensitive information.
-With New Age input
