BSEC forms inquiry committee to investigate four companies

The companies to be investigated are Stylecraft Limited, Information Services Network, Fine Foods Limited, and Northern Jute Manufacturing Co Limited

 
The Bangladesh Securities and Exchange Commission (BSEC) has formed an inquiry committee to investigate the unusual price hike in shares of four listed companies. 

Dhaka Stock Exchange (DSE) sources said that the regulatory body formed the committee in a meeting on Tuesday.

The companies to be investigated are Stylecraft Limited, Information Services Network, Fine Foods Limited, and Northern Jute Manufacturing Co Ltd.

“The inquiry committee was asked to submit a report within 30 work days. Although no price sensitive information has been released by the companies, the prices of the companies’ shares witnessed a sharp rise in the last one and a half months. This prompted the commission to launch an investigation” BSEC Executive Director and spokesperson Md Saifur Rahman told the Dhaka Tribune. 

“The committee will investigate the reasons behind the unusual increase in the prices of shares of these companies, and will look into possible insider trading, price manipulation, and securities violations” he added.

BSEC Deputy Director Shamsur Rahman and Assistant Director Nannu Bhuya will lead the committee. 

When BSEC issued a notice to the companies regarding the price hike, the companies said there was no undisclosed price sensitive information that may have led to the upsurge.

During the last one and half months, the price of shares of Stylecraft Limited increased from Tk697 to Tk1,287. In the same period, the share price of Information Services Network increased from Tk26.10 to Tk34.70.

Meanwhile, the share price of Fine Foods Limited increased from Tk32.80 to Tk39.20, while Northern Jute Manufacturing shares went from Tk592.90 to Tk863.20.

Speaking anonymously to the Dhaka Tribune, a DSE official said: “The share prices of these companies are increasing abnormally. It is easier for syndicates to take advantage of small capital companies and make large sums of money by manipulating prices, due to the small number of shares in the market.”

Recently, BSEC has been taking tough action to stop the unusual hike in share prices of a number of small capital companies that are not in full-fledged production.

To protecting investors’ rights and curb price manipulation, the regulator has suspended trade at the bourses and launched investigation against several of these companies.

In the aftermath of action by the regulator, the share prices of most of these companies have started to fall. 

In the last seven months, share prices of some companies showed continuous increases despite the companies not performing well and being traded under the A, B and Z category. 

Stock market stakeholders say a syndicate is controlling the share price of small capital companies. While the syndicate is making profits, general investors are being affected.
Source: https://www.dhakatribune.com

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