Photo: Collected
A syndicate led by a brother and sister manipulated the shares of Janata Insurance Company Limited, a company listed on the stock exchange. The leader of the syndicate is Md. Saifullah, along with his brother Md. A.G Mahmud and sister Hasina Akter.
Through serial trading, the syndicate bought 17,877,443 shares of the insurance company between August 17 and August 31, 2021, and subsequently sold them. They made a profit of Tk 5 crore 76 lakh 1 thousand 464. Of this, Tk 2 crore 33 lakh 24 thousand 151 was Realized Capital Gain, and Tk 3 crore 43 lakh 77 thousand 313 was Unrealized Gain.
Other members of the syndicate include Nur-E-Alam from OK Enterprise, A.K.M Anwarul Haq, SM Mahbubur Rahman, Maksuda Begum, and Md Jazib Mahmud Shajib. These details emerged in the investigation report of the Dhaka Stock Exchange (DSE).
Regarding the manipulation, capital market analyst and professor at the University of Dhaka, Abu Ahmed, told The Daily Messenger, “Share price manipulation is not stopping at all; rather, the tendency towards manipulation is increasing day by day. The shares of Janata Insurance are proof of that. This syndicate has manipulated shares earlier but was fined nominally. As a result, they are getting the opportunity to manipulate again.”
The DSE investigation report states that from August 17 to August 31, 2021, a period of 15 days, the share price of Janata Insurance increased from Tk 39 to Tk 62.90, a rise of 61.28 percent. The main perpetrator of the manipulation syndicate, Md. Saifullah, alone sold 55.03 percent of the shares. His brother Md. A.G Mahmud sold 14.10 percent, and his sister Hasina Akter sold 2.21 percent of the shares. In total, the three siblings sold 71.34 percent of the shares and made a cash profit of Tk 2 crore 33 lakh 24 thousand 151. Additionally, at that time, there was a profit of Tk 3 crore 41 lakh 47 thousand 313 in the market.
Furthermore, Nur-E-Alam sold 3.30 percent of the total shares, OK Enterprise 2.16 percent, A.K.M Anwarul Haq 2.38 percent, SM Mahbubur Rahman 2.87 percent, Maksuda Begum 2.01 percent, and Md Jazib Mahmud Shajib 1.28 percent of the shares.
The Bangladesh Securities and Exchange Commission (BSEC) identified the three siblings as the main perpetrators of the share manipulation. Consequently, the BSEC called for a hearing for the three. After hearing their statements, it was proven that they were involved in share manipulation. These three sold more than 10 percent of the company's total shares on August 23, 24, 25, 26, 29, and 31, making a profit. As a result, the three siblings were fined a total of Tk 65 lakh.
Among the three, Md. Saifullah was fined Tk 40 lakh. He made a profit of Tk 4,19,20,233 by selling shares at Tk 3.30 and Tk 6.47 per share in 15 days. Of this, he made a Realized Capital Gain of Tk 1 crore 61 lakh 66 thousand 759 and an Unrealized Gain of Tk 2,57,53,474.
Concurrently, his brother Md. A.G Mahmud and SM Motaharul Janan made a profit of Tk 81lakh 45 thousand 878 from the capital market through manipulation. Of this, they made a Realized Capital Gain of Tk 68 lakh 48 thousand 895 and an Unrealized Gain of Tk 12,96,983. For this reason, they were fined Tk 12 lakh.
Additionally, his sister Hasina Akter was fined Tk 5 lakh. She made a total profit of Tk 75 lakh 35 thousand 350. Of this, she made a Realized Capital Gain of Tk 29 lakh 62 thousand 002 and an Unrealized Gain of Tk 45,73,348.
In a letter dated May 29 signed by BSEC Commissioner Dr. Rumana Islam, they were fined and asked to deposit the fine amount in the BSEC's bank account within 30 working days. Otherwise, the institution will take further action as per the Securities Act.
Commenting on the overall issue, Mohammad Rezaul Karim, Executive Director and Spokesperson of the BSEC, told The Daily Messenger, “In 2021, there was manipulation in the shares of Janata Insurance Company. The manipulation syndicate has been identified and fined.”
Regarding this matter, the main perpetrators of the manipulation syndicate, Md. Saifullah and Md. A.G Mahmud, declined to comment.
Messenger/Fameema
