BSEC decides to take action
The capital market regulator on Thursday decided to take action against Shahjibazar Power Company for hiding price sensitive information. The Bangladesh Securities and Exchange Commission made the decision in a regular commission meeting presided over by its chairman M Khairul Hossain, a BSEC news release said. The commission, however, did not find any connection between the information leak from the company and the abnormal price hike of the company’s shares.
As per the BSEC findings, Shahjibazar did not disclose the information of the launch of commercial operation of Petromax Refinery Limited, a subsidiary of Shahjibazar, the BSEC release said.
BSEC officials said that some investors might have got the information of Petromax’s commercial operation from the company insider and bought huge amount of shares that resulted in abnormal increase in the company’s share prices.
As the commercial operation of Petromax will increase Shahjibazar’s profit notably, the launch of its operation was an important price sensitive information, they said.
As per the securities rules, companies are bound to disclose any price sensitive information within 30 minutes, the officials said.
But, the company is yet to make any disclosure in this regard after getting enlisted with the capital market in July 15 this year.
Besides, the BSEC investigation committee also found different irregularities committed by four brokers in trading Shahjibazar’s shares, the BSEC release said.
The brokerage houses are PFI Securities, Sharp Securities, Galaxy Capital and Mona Financial Consultancy and Securities, said the release.
The BSEC release said the commission also decided to take action against the brokerage houses due to the rules violation.
It said that Sharp Securities provided loan facility to its director in purchasing Shahjibazar’s shares, violating a BSEC directive issued in 2012.
Galaxy Capital and Mona Financial Consultancy and Securities allowed same scrip netting facility to their clients in purchasing Shahjibazar’s shares which is not allowed by the securities rules, said the BSEC.
The BSEC investigation also found that PFI Securities showed 10,000 less shares of Shahjibazar in its clients’ accounts, violating different sections of Securities and Exchange Ordinance, 1969, Securities and Exchange Rules, 1987 and Securities and Exchange Commission Rules 2000.
Shahjibazar’s share price rose by 256.80 per cent or Tk 64.20 to Tk 89.2 on August 10 since its debut at Tk 25 in mid-July.
Following the abnormal price hike of Shahjibazar shares, the BSEC on August 3 formed a two-member investigation committee to look into the matter.
The Dhaka and Chittagong stock exchanges on August 11 suspended trading of the Shahjibazar’s shares as its share prices continued to rise despite BSEC committee formation.
The two-member committee of the BSEC submitted its report to the commission on August 21.
Meanwhile, the commission’s investigation did not find any short of irregularities in FAR Chemical Industries’ share trading and abnormal price hike.
The shares of FAR Chemical Industries were traded at Tk 43 each on July 15 this year.
Its share price increased to Tk 59.20 on August 3 without having any price sensitive information.
-With New Age input
