Finds DSE investigation
CVO Petrochemical Refinery Limited, previously known as Chittagong Vegetable, has awarded illegally at least 1.40 lakh bonus shares worth around Tk 12.27 crore to an individual, a Dhaka Stock Exchange investigation found. 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 submitted to the Bangladesh Securities and Exchange Commission said Delower received bonus shares of CVO Petrochemical twice in 2010, 2011 and 2012.
The report said that CVO Petrochemical transferred the shares on a written instruction of its chairman Shamsul Alam Shamim.
The shares have been transferred from CVO Petrochemical’s ‘suspense account’ under NCCB Securities and Financial Services Limited, the DSE report said.
Delower received bonus shares of the company twice in 2010 — first time 24,000 shares and second time 17,000 shares.
The DSE investigation report also said that issuance of bonus shares to Delower in 2010 could not be verified as CVO Petrochemical did not provide the detailed shareholders report of the company for 2010 as of on the record date in that year even after DSE’s query.
‘After scrutinising the documents submitted by the company for 2011 and 2012 the DSE investigation team did not find any information or shareholding position of Delower Hossain on the record dates for entitlement of dividend for the years,’ the bourse’s report said.
‘So it is not clear to us how Delower Hossain received dividend for the year 2011 and 2012 as there was no record of his shareholding on the record dates for dividend entitlement for those years,’ it said.
The investigation team also said that CVO Petrochemical violated subsection 46 (2) of Depository Rules- 2003.
In reference to the DSE investigation report, the BSEC on Monday asked the managing director, directors, company secretary of CVO Petrochemical to explain their position regarding the matter.
On September 24, the DSE suspended trading of the shares of CVO Petrochemical as the price of its shares continued to rise abnormally and launched an investigation into the matter.
The BSEC on September 15 had launched a probe against CVO Petrochemical and three other companies, but no action has been taken yet.
CVO Petrochemical’s shares were being traded at Tk 89.6 each in April, but the price rocketed to Tk 634.7 by the end of August despite the company declaring no price sensitive information.
The stock market probe committee for the stock market crash in 2010-2011 in a case study showed that the company was in a loss of Tk 2.36 crore in 2009 but it declared a 20 per cent stock dividend in 2010. The committee also suggested that the BSEC should run further investigation into price hike of shares of Chittagong Vegetable to verify the reasons for such rise in one year.
Share price of Chittagong Vegetable was Tk 119.75 on January 4, 2010, which rose to a whopping Tk 5,099.50 on December 31, 2010.
-With New Age input
