Shakib Al Hasan is being investigated by the Securities and Exchange Commission, or SEC, of which the Test and T20 International captain was a goodwill ambassador in 2017, on charges of stock market manipulation.
SEC is conducting the investigation into the allegations against Shakib in the wake of suspicious trade through his personal beneficiary owners or BO account and that of the company he owns.
Rezaul Karim, a spokesperson for SEC, said they have asked Shakib for an explanation and added that no one can evade the penalties if the charges are proven.
After getting involved in different businesses, Shakib made his way into the capital market and opened brokerage house Monarch Holdings as a joint venture.
Currently in the West Indies, he was not available for comment. But when asked about Monarch Holdings previously, Shakib had declined comment, saying he would only speak about the sport.
In 2017, then the SEC Chairman M Khairul Hossain made Shakib the goodwill ambassador during a ceremony of the World Investor week where the 35-year-old allrounder gave a speech as well.
bdnews24.com was able to view multiple reports submitted to the SEC. The show-cause notice sent to Shakib was published on SEC’s website.
The capital market authorities moved against the recent abnormal rise in the trend of shares of One Bank, BDCOM, Sonali Papers and Fortune Shoes among some other companies.
As the primary regulator, the Dhaka Stock Exchange, or DSE, formed an investigation team to look into it. Shakib’s name came up in the reports.
SERIES TRADE OF ONE BANK SHARES
The DSE examined the unusual uptrend of shares of One Bank, a listed company, at the end of last year. Its share prices rose from Tk 12.6 to Tk 20.1 between Nov 15-30, a 59.52 percent rise.
The investigation then pulled out a list of top buyers and found 15 individuals and companies traded the highest number of shares. Among them, Shakib himself traded 8.5 million shares, of which 7.5 million were bought.
Others involved in these trades are controversial stock market player Md Abul Khayer Hiru, the deputy registrar of the Department of Cooperatives, his wife Kazi Sadia Hasan, father Abul Kalam Matber and sister Kanika Afroze.
According to the report, the leader of the circle carries out a series of trading of One Bank shares through 13 BO accounts to artificially raise prices. Matber’s BO account is mostly used for the trades.
This group bought almost 85 percent of the One Bank shares in a single day. Along with the capital market, they bought shares from the block market in a similar fashion. They also traded shares among themselves, the investigation found.
After pushing the trend abnormally high for these shares, the close-knit group made Tk 143.5 million in capital gains through sales in only 15 days and can make another Tk 143.8 million in profit by selling what they still have in possession.
The report mentioned that series trading breaches Article 17 of The Securities and Exchange Ordinance, 1969.
“It is evident that Abul Kalam Matber and his associates directly and indirectly carried out One Bank share series trading and raise their prices using 13 BO account.”
SEC slapped Matber and his associates with Tk 30 million in fines on Aug 2, according to the report.
Between Mar 7 and Mar 10, the share prices of BDCOM rose by 45 percent, from Tk 23.6 to Tk 34.3.
DSE’s investigation found Hiru, his wife Sadia, DIT Co-operative Chairman Hiru, Investment Corporation of Bangladesh and Monarch Holdings Ltd to be the main traders of these shares.
Along with Shakib, Sadia, Matber and Kanika are partners in Monarch Holdings, which received approval as a brokerage house at the start of 2022.
In this case, BDCOM shares were mostly traded through five BO accounts, including a personal account of Sadia, a joint account for Hiru and Sadia, and another of Monarch.
The highest number of BDCOM shares were traded through DIT Co-operative Ltd’s BO account by Hiru as the chairman of the company.
DSE sent show-cause notices for unethically raising share prices of One Bank and BDCOM and Hiru provided replies in writing in both cases.
The BSEC report mentioned that the replies from “Matber and his associates” and “DIT Co-operative Ltd and associates” make the complaint appear true.
BSEC proceeded to fine DIT Co-operative and associates Tk 5.5 million on Aug 2.
Hiru was not available for comment.
Rezaul, the SEC spokesperson, said: “The investigators analysed data from a particular period to identify the reason behind the rise of share prices. SEC demands explanations when the rules are broken. The person or people in question provides explanations in-person at the commission. Only when their statement proves their wrongdoing beyond doubt is a penalty delivered. The same happened here.”
On Shakib’s involvement, Rezaul said: “Institutionally, no shareholders from Monarch Holdings or any other companies will be punished. But they will face penalties if they are directors.”