The Bangladesh Securities and Exchange Commission on Sunday approved the Dhaka Stock Exchange’s proposal to conduct an inspection of the affairs of BBS Cables Limited following an abnormal hike in the prices of the company’s shares because of ‘manipulation’.
The approval came after the bourse on December 12, 2017 sought permission from the regulator for the inspection, showing concerns over the share price hike of BBS Cables from its debut trading day.
The BSEC also asked the DSE to send the inquiry report to the commission within 15 days.
The company faced accusation of price manipulation by buying and selling shares within the family members and relatives of the board of directors.
On November 30, the BSEC held a hearing of the persons accused of manipulating BBS Cables’ share prices.
Khadija Taher Syria, wife of BBSCL chairman Mohammad Badrul Hasan, and BBSCL managing director Abu Noman Howlader are among the accused.
A senior official of the commission said that the accused gave written explanations regarding the allegations raised against them after a BSEC investigation committee found wrongdoings behind the unusual price hike of BBS Cables after its enlistment with the bourse on July 31, 2017.
The share prices of BBS Cables which were issued at Tk 10 each through an initial public offering had increased to Tk 149.70 on August 21 in just 14 trading sessions.
Although BBSCL got notification of awards of two contracts on July 31 from the BREB, the same date of its debut trading day, the company disseminated the information to the stock exchanges on August 27 when the final contracts were signed, which was a violation of a BSEC directive.
Before the dissemination of the price sensitive information on August 27, Khadija Taher Syria, Abu Noman Howlader, Noman’s brother-in-law Md Forhard Hossain, brokerage firm Prudential Capital Limited, investors Hasan Jamil, Md Nazrul Islam, Syed Anisur Rahman and Kabir Ahmed, made substantial amount of profits by trading shares of BBS Cables. By trading shares during July 31 to August 24, Khadija realised Tk 1.87 crore in profit and her unrealised gains were Tk 0.87 crore, the BSEC investigation found.
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