Dhaka, Bangladesh (BBN)-The Bangladesh’s securities regulator has banned the activities of the chief executive officer (CEO) of First Securities and Services for five years and also fined BDT 1.0 million due to his involvement with securities business and unlawful activities, officials said.
The regulator has also imposed the penalty of BDT 5.5 million on some other stock brokers and individuals for breaching securities rules while conducting share trading.
The decisions were taken at a commission meeting held on Tuesday at the office of the Bangladesh Securities and Exchange Commission (BSEC), the securities regulator.
According to BSEC investigation, Kazi Saifur Rahman, the CEO of the First Securities and Services (FSS), secured overall 42.30 percent profit by conducting the trading of the shares of Bangas through his two accounts opened in the FSS and Heritage Capital Management.
The securities regulator revealed that Kazi secured the profit from April 8, 2013 to July 28, 2013 and the Bangas declared to issue five rights shares against one exiting share at a board meeting held on July 25, 2013.
Later, the FSS singed a MoU with the Bangas to work as issue manager of the rights issue.
“Those activities, which were executed to ensure ill objective, are tantamount to series of transaction,” said the securities regulator, in a statement.
Kazi also secured 4.29 percent profit by transacting the shares of Tallu Spinning Mills through his own account.
“As a CEO of the FSS, Kazi breached the rules of merchant banker and portfolio manager through his involvement with share trading,” the BSEC said.
As per the BSEC decision, Kazi will have to pay a penalty of BDT 1.0 million whereas the FSS and Heritage Capital Management will have to a penalty of BDT 1.5 million and BDT 2.5 million respectively.
As per another BSEC decision, the FSS will also have to pay a penalty of BDT 0.5 million as it provided false statement in the prospectus while working as the issue manager of the FAR Chemical Industries.
The FAR Chemical Industries has also been fined BDT 0.5 million.
The regulator has also imposed a penalty worth BDT 0.5 million on Apex Investment and BDT 0.5 million on Phoenix Securities for breaching securities rules.
BBN/BB/SS-10Sept14-11:50am (BST)