The share manipulation in a nutshell
- Shares were up by 172.58%
- Hiru & associates made Tk15.22cr in realised and Tk23.33cr in unrealised gains
- Shares surged 94.67%
- Tk6.13cr realised and Tk23.89cr unrealised gains from Fortune shares
The Bangladesh Securities and Exchange Commission (BSEC) has fined controversial investor Abul Khayer Hiru and his associates Tk5.25 crore for manipulating the shares of NRBC Bank and Fortune Shoes in May 2021.
Sources at the commission said it found that Abul Khayer, his father Abul Kalam Matber, wife Kazi Sadia Hasan, sister Konika Afroze, brother-in-law Kazi Farid Hasan and his company DIT Co-operative Limited were involved in the foul play.
In early July, the BSEC fined Matber and associates Tk1.5 crore for manipulating Fortune Shoes shares and Konika and associates Tk3.75 crore for manipulating NRBC Bank shares.
Cricketer Shakib Al Hasan was also named among their team but a few shares were traded in his BO Account with EBL Securities.
This correspondent tried to speak to Abul Khayer over his mobile phone in this regard but he did not answer.
Top executives at several brokerage firms and merchant banks said that in 2021, Hiru's entire family together traded shares worth around Tk8,000 crore.
Hiru and his associates have made more than hundreds of millions of taka by using all the methods of manipulation in the market. Because of them, many investors have lost capital. In that context, the securities regulator has slapped just a nominal fine on him and his associates. Manipulators will get more inspiration from this, the officials added.
According to them, the fine is not enough for the manipulators. Rather, they should be prosecuted for foul play.
Sources at the commission said Abul Khayer and his family made a profit of Tk6.13 crore by raising the prices of Fortune Shoes shares through manipulation. And, unrealised gain is Tk23.89 crore. This account is only for May 2021.
Similarly, they made a profit of Tk15.22 crore from NRBC Bank shares, while the unrealised gain was Tk23.33 crore.
Due to Hiru's involvement, the share price of Fortune Shoes increased by 787% from April 2021 to April 2022 to Tk140 and the share price of NRBC Bank increased by 256% to Tk39 from April to October 2021.
However, the BSEC has fined the manipulators only for May 2021 transactions.
Currently, the shares of these two companies are trading at Tk79.5 and Tk19.
In a written reply to BSEC's notice on manipulation, Abul Khayer said, "We did not invest in the stock market for manipulation. New investments were made in some undervalued shares. And due to new investments, both the price and trading volume of shares increased."
He expressed regret if there was a violation of the securities laws.
Earlier in June, the BSEC fined Abul Khayer and his associates Tk2.09 crore for manipulating shares of three insurance companies – Green Delta Life Insurance, Dhaka Insurance and Asia Insurance. But they made a huge profit of over Tk50 crore by manipulating these shares.
Abul Khayer is a deputy registrar at the Department of Cooperatives. He joined the post after qualifying for the 31st Bangladesh Civil Service (BCS) exam.
He was completely unknown in the stock market before 2020. In mid-2020, his name first came to the fore following the abnormal jump in the insurance share prices, especially shares of the general insurance companies. Hiru basically invested the funds of the Cooperative Department in the stock market, which reportedly earned him a lot.
The Dhaka Stock Exchange (DSE) has submitted an investigation report to the BSEC regarding the manipulation of shares of about 20 other companies by Hiru.