Punishment for stocks manipulation will help reian trust in market impact, experts hope

Stakeholders hope the conviction of two fraudsters for the 1996 capital market manipulation will help restore the investors’ faith in the stock market.

A special tribunal on Monday sentenced two top officials of Chic Textiles to four years of rigorous imprisonment and fined Tk 3 million each for share price manipulation.
 
This is the first verdict in a case filed over the 1996 scam, SEC Panel Lawyer Masud Rana Khan said.
 
Capital market analyst Prof Mohammad Musa said the conviction would serve as a warning to the fraudsters.
 
“It will be good for the capital market in the long run,” he told bdnews24.com.
 

IDLC Investment Limited’s Managing Director Md Muniruzzaman believed the verdict would help the investors regain trust in the struggling market.

“People won’t feel cheated anymore,” he told bdnews24.com. “They will now believe that manipulators will be punished.”

Capital market regulator SEC filed cases against 15 organisations and 36 individuals over price manipulations in 1996 that caused the market to crash, leaving thousands of investors broke.

Publicly listed in 1995, Chic Textile raised Tk 125.40 million from the market. Its share prices rose to Tk 46 from the face value of Tk 7 in 1996.

A case was filed against Chic Textile’s Managing Director Md Maksudur Rasul and Director Iftekhar Mohammad on Apr 2 the following year.

The case was shifted to a special tribunal dealing with capital market cases in June this year.

On Jun 28, arrest warrants were issued against the two, who had secured bail from the High Court.

The judge delivered the verdict in absentia on Monday.