Dhaka,  Sunday
14 April 2024

SHURWID INDUSTRIES SHARE MANIPULATION

Investors count Tk 44cr loss

MD Mahfuzul Islam

Published: 07:56, 5 March 2024

Investors count Tk 44cr loss

Photo : Messenger

A group of sponsor directors of Shurwid Industries has been accused of manipulating the share price of their company through serial trading, increasing the price of their company’s shares from Tk 14 to a maximum of Tk 21.60 between April 30 and May 25, 2023. During this period, the manipulators sold shares worth Tk 15 crore and withdrew the profit.

As a consequence, the capital of the investors decreased by Tk 43.59 crore due to buying shares at high prices driven by greed. This information was obtained from the source of the capital market regulatory body, the Bangladesh Securities and Exchange Commission (BSEC).

According to the BSEC, a syndicate of sponsor directors of the company commenced serial trading on April 30, 2023, when the company’s share price was Tk 14. Within just 25 days, the share price increased by Tk 7.60, and the manipulators sold it at Tk 21.60 on May 25, resulting in a profit of Tk 15 crore. Shares of the company, which has a debt of Tk 11 crore, traded at Tk 14 on March 4. Consequently, the investors incurred a loss amounting to Tk 43,59,49,900.

In response to these developments, capital market expert Professor Abu Ahmed told The Daily Messenger that the company is speculative and entered the market through fraud, which continues. He emphasised that BSEC should take strict action against the sponsor directors of the company.

BSEC directed the Dhaka Stock Exchange (DSE) on May 29 last year to investigate the matter after observing significant fluctuations in the share price of Shurwid Industries within a month. According to section 2(cc) of The Securities and Exchange Ordinance, 1969, the Commission instructed the DSE to investigate. Subsequently, the investigation team of DSE requested information regarding the purchase and sale of shares from Shurwid Industries Limited on June 4, 2023. However, the company did not provide any information to the investigation team of DSE.

Initially, DSE’s investigation team attempted to contact the company through the phone numbers and email addresses provided on the company’s website but received no response. Subsequently, on July 21, 2023, they visited the company’s head office and factory. However, the company’s chairman, managing director, chief financial officer, director, company secretary, or any senior officer did not communicate with them.

Consequently, the enquiry committee stated in its report that the company authorities deliberately avoided the inquiry committee and did not provide any documents, even to the sponsor directors of the company, which is in violation of Section 21(2) of the Securities and Exchange Ordinance 1969.

Then, in light of the investigation report, BSEC summoned Shurwid Industries Limited’s chairman, managing director, all directors, and the company secretary on August 27 of that year. According to BSEC, the hearing would be held on September 10 of the same year. However, no one from Shurwid Industries appeared at that hearing either. Subsequently, time was given several times, but no one showed up.

According to BSEC, since the company has not cooperated with the enquiry committee of DSE, the interests of the investors have been and continue to be undermined, which is contrary to the development of the capital market. Therefore, under the power of Section 22 of the Securities and Exchange Ordinance 1969, Shurwid Industries was fined Tk 2 lakh. On January 31, Commissioner Rumana Islam ordered the company to pay the fine within the next 30 days.

When asked about the manipulation of shares by the company’s sponsor directors, who have not paid dividends to shareholders for three years, BSEC Executive Director and Spokesperson Mohammad Rezaul Karim told The Daily Messenger, “The share price of the company has increased at an abnormal rate without any reason. So, there is manipulation. An investigation committee has been formed to find out who is involved in this manipulation. The company did not cooperate with the investigation committee in these matters.”

Although this reporter tried to contact the company chairman Mahmudul Hasan several times on his mobile phone, he did not receive the call.

According to the 2019 report, the total number of shares of the company is 5,73,67,750. Of these, sponsors/directors hold 68,89,867 shares, general shareholders hold 3,83,61,814 shares, and Institutions hold 1,21,16,069 shares.

Messenger/Fameema

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