The Bangladesh Securities and Exchange Commission on Tuesday slapped Tk 1.1 crore in fines in total on nine directors of United Airways, including its chairman, collectively as they gained profits by trading shares of the company by knowing the price sensitive information before publication.
The commission also fined three investors Tk 30 lakh for manipulating share prices of now out-of-operation United Airways few years back.
The decision to impose fine came from a BSEC meeting with its chairman M Khairul Hossain in the chair.
The BSEC fined directors Tofail Ahmed Choudhury, Ashiq Mia, Yusuf Chudhury, Modhuris Ali, Sidhiqa Ahmed, Khandaker Mahfuzur Rahman and Tahmina Begum Tk 10 lakh each.
The watchdog also imposed Tk 20 lakh penalty each on the company’s chairman Tasbirul Ahmed Choudhury and director Khandaker Taslima Choudhury.
The commission in a press release said that the nine directors broke the securities law by gaining profits through buying and selling shares of the company knowing the price sensitive information before it was published. They also traded shares during the period when share trading is forbidden in violation of commission’s regulations.
The commission in the meeting also warned the company as it did not refer ‘deferred tax liabilities’ in its financial statement that overvalued the earnings per share and net asset value of the listed company in 2012 and ultimately affected the stock market.
The commission fined three investors- Sayed Shirajullah, Abu Sadat Sayeem and Yakub Ali Khandaker- by Tk 10 lakh each for manipulating with the shares of United Airways.
The operation of United Airways remained suspended since May 5 last year as none of the eleven aircraft of the organisation was fit for flying.
The company declared loss by Tk 1.66 per share for the year ended June 30, 2016 and declared no dividend for last two years.
The sponsor-directors of the company now hold only 4.16 per cent shares as they ditched their holdings to general investors who now hold 69.61 per cent share of the company. The institutional investors hold 14.05 per cent shares of the airlines.
Because of its poor financial performance and suspension of flights, the share price of the company has now come down to around Tk 5 leaving the general investors in a quandary.
Besides, the capital market regulator in its meeting also fined M Securities Limited by Tk 20 lakhs and its managing director Chowdhury Nurul Azam and his wife Zakia Chowdhury as they provided loan to their director and relatives’ accounts.
The commission also found that the brokerage house traded shares as a buyer and seller at the same time and also traded in the accounts of its directors and relatives without changing the owners that also breached the commission laws.
The commission in the meeting also okayed Tk 400-crore non-convertible subordinated floating rate bond of AB Bank. The tenure of the bond will be for seven years.
The face value of each unit of the bonds will be Tk 1 crore.
Only corporate bodies, financial institutions and funds will be allowed to subscribe the bonds through the private placement.
MTB Capital Limited will act as the trustee of the bond while RSP Capital Limited will be lead arranger of the bond.
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