The securities regulator has taken stern actions against three listed companies and some market operators by imposing an aggregate amount of penalty worth around Tk 248 million for their unlawful activities.
The decisions of imposing the substantial amount of penalty were taken in a meeting, held at the office of the Bangladesh Securities and Exchange Commission (BSEC) on Wednesday.
The securities regulator imposed penalties for the first time on three directors of C & A Textiles at an amount that is higher than the amount they gained by selling their shares unlawfully.
According to the BSEC information, Rukshana Morshed, Sharmin Akther Lovely and Bangladesh Shoes Industries earned profits worth Tk 69.80 million, Tk 36.1 million and Tk 15.9 million respectively by selling their huge volume of shares, owned at C & A Textiles, without giving prior declarations.
"The time periods of selling their shares, owned at C & A Textiles, were very close, and the company was closed just after execution of their sales orders," said the BSEC officials, adding that the company still remains closed.
Later, the securities regulator called them in a hearing, but they did not attend it.
According to the BSEC decision, Rukshana Morshed, managing director, Sharmin Akther Lovely, director, and Bangladesh Shoe Industries, corporate director, will have to pay penalties worth Tk 80 million, Tk 40 million and Tk 20 million respectively.
"Those directors will not be allowed to be the directors of other listed companies also," the BSEC added.
Previously, experts criticised the regulatory decisions, as the amounts of penalty were lower than the amounts of profit, earned by market players by breaching rules.
The BSEC also said C & A Textiles and Tung Hai Knitting and Dyeing Industries failed to submit monthly shareholding reports in 2017 and 2018.
The companies did not reply to the queries, made by the stock exchanges. The companies also did not attend the hearing, and their factories were found closed during an inspection conducted by the stock exchange.
According to the BSEC decision, the directors, other than independent ones, of both the companies will have to pay penalty worth Tk 10 million each.
Besides, BBS Cables, before going public, purchased machineries worth Tk 576.70 million from a company, owned by Asharf Ali Khan, a director of BBS Cables.
Such transactions are treated as 'related party transaction' in the company's IPO prospectus. But BBS Cables did not mention the transactions in the IPO prospectus accordingly.
"The company's the then auditor and issue managers issued due diligence certificate, hiding the transactions executed by BBS Cables," according to the BSEC's findings.
According to the regulator's decision, each of the five directors of BBS Cables will have to pay a penalty worth Tk 0.5 million.
Besides, Ahmed Zaker & Co, the auditor, and two issue managers - Banco Finance and ICB Capital Management - have been fined Tk 0.50 million each.
In Wednesday's meeting, the securities regulator also slapped fines worth Tk 5.0 million on Salta Capital, a TREC-holder of the Dhaka Stock Exchange (DSE), for using its clients' funds for own purposes.
The company also failed to prepare reconciliation statement for the securities, purchased by its clients.
The securities regulator also warned the state-run Investment Corporation of Bangladesh (ICB), as it breached the regulatory rules by renunciating the rights shares of IDLC Finance without taking signature of the clients.
The BSEC also warned Unicap Securities and Firoz Rashid Securities for breaching the securities rules regarding consolidated customers' accounts.
Meanwhile, the BSEC on Wednesday approved the proposal of perpetual bond worth Tk 5.0 billion, to be issued by Standard Bank.
The bond is non-convertible, fully redeemable, unlisted, unsecured, and coupon bearing perpetual.
It will be issued to different financial institutions, banks and high net worth individuals through private placement.
