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The securities regulator on Wednesday fined managing director of Imam Button Industries ASM Hasib Hasan Tk 10 million for manipulating the company's share price by making false financial claims.
Imam Button Industries, which was changed into Hami Industries, resumed operations last year after a long break and moving to fisheries and tannery business from manufacturing of garment accessories.
In order to influence the company's share price, Imam Button Industries reported a profit of Tk 11.4 million for H1, FY24 and Tk 1.3 million of profit was shown from the sales of fish. It also recommended a 1 per cent interim cash dividend.
But in an inquiry the Dhaka Stock Exchange (DSE) found that there was no fish in the company's ponds and the disclosure regarding tannery business was baseless too.
The securities regulator reconstituted the company's board in January 2023. Mr Hasib took responsibility as managing director by acquiring the company's shares.
The objective of issuing interim cash dividend was to change the company's listing category in an effort to avail of reduced trading cycle and margin loans.
The shares of Imam Button were traded at around Tk 20 each in January 2021, which rose to Tk 24 in January 2022 and then soared to Tk 156 in July of the same year.
Following a disclosure regarding the company's shift to fish farming, the stock further jumped to Tk 220 each share in November last year.
Apart from imposing the fine on Imam Button, the Bangladesh Securities and Exchange Commission (BSEC) took some other decisions at a meeting on Wednesday, including the appointment of independent directors to the boards of the bourses.
It also took stern actions against Sinha Securities for not fulfilling the gap in its consolidated customers' account (CCA).
The board of the Chittagong Stock Exchange (CSE) became non-functional following the resignation of all independent directors in the wake of the recent change in political landscape.
To make the CSE's board functional, the securities regulator appointed seven independent directors.
They are Alamgir Morshed, CEO of Infrastructure Development Company, Dr. Saiful Islam, a professor of Bangladesh University of Engineering Technology, AKM Habibur Rahman, former managing director of Teletalk Ltd., Dr Mahmud Hasan, a faculty of North South University, M Zulfiker Hossain, a consultant, Naznin Sultana, finance director of Asian University for Women, Farida Yeasmin, a deputy secretary of the Financial Institutions Division (FID).
The BSEC earlier appointed seven independent directors to the board of the Dhaka bourse.
Of them, two expressed inability to join the board. That was why the BSEC on Wednesday appointed AF Nesaruddin, senior partner of Huda Vasi Chowdhury & Company, and Sheyada Zakerin Bakth Nasir, chief consultant of ZN Consultant, as independent directors of the premier bourse.
Meanwhile, the securities regulator rejected the plea of Sinha Securities to extend the timeframe for fulfilling the shortage in clients' funds in the company's consolidated customers' account (CCA).
It will request the central bank to ensure debit suspension in the bank accounts of the company's all directors and chief executive officer. Apart from freezing their BO (beneficiary owner's) accounts, the securities regulator will also seek a travel ban on them.
Different facilities, including IPO (initial public offering) quota facility, will not be available for Sinha Securities.
These actions had been taken against Dhanmondi Securities for similar breach of conduct. At Wednesday's meeting, the securities regulator withdrew the restrictions on Dhanmondi Securities as the company had fulfilled the fund shortage in its CCA and made a commitment to refrain from rules violations in the days to come.