Dhaka bourse finds Emerald's link with artificial stock price hikes

Emerald Oil Industries experienced an astounding 508 per cent stock price hike in the five months to July 12 last year, which, according to the Dhaka bourse, was the outcome of purposeful price sensitive information.

On several occasions, the information did not lead to the results intended.

The rice bran edible oil producer, according to the prime bourse, disclosed information about the resumption of its commercial operation after Japan-based Minori had taken control of its board, establishment of a new branch in Japan, installation of a new boiler, signing of an agreement with the Japanese venture, among others, and every time the stock climbed up on the bourses.

The FE witnessed a copy of the investigation report prepared by the bourse.

The DSE also found that two individuals -- Abu Sadat Md. Faisal and Md. Razib Al Mamun -- played a role in manipulating the stock price. They executed a series of transactions of the shares of Emerald Oil to artificially boost the market price.

The share price of Emerald Oil soared from just Tk 30 per share to Tk 182.5 per share between On February 16 and July 12 last year.

The stock then went on a downward spiral and closed at Tk 26.30 per share on Monday, having declined 85 per cent from July last year.

A group of people made hefty profits by selling overpriced shares to general investors.

In February this year, The FE ran a story on how Emerald Oil violated securities laws by issuing a press release to the media about bringing in a foreign investment worth Tk 4 billion. Minori Bangladesh claimed in the statement to have inked a deal with Dubai-based Safa Capital, saying it would sell shares to get the fund as working capital or keep those as collateral. However, Minori's entire stake in the company is not worth as much and there is a lock-in period of three years.

Meanwhile, Minori Bangladesh, which invested in Emerald Oil in January 2022, bagged huge profits by selling out a portion of their holdings.

It received 35.22 million shares at a price of Tk 10 each and later sold 3.6 million shares at prices between Tk 53 and Tk 69 per share. Minori expressed its intention to sell 3.5 million shares at market price in March and the sales were completed by April 18. During this period, the stock of Emerald Oil fluctuated between Tk 53 and Tk 69 per share.

If the shares were sold at Tk 65 each, for example, Minori made capital gains of Tk 234 million by offloading only 10.22 per cent of its total holdings.

On July 23, 2023, the company said it had signed a memorandum of understanding (MoU) with a Japanese company -- Be Born Company - for export of 3,000 MT crude rice bran oil. That would have doubled Emerald's export.

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