Nine United Airways directors fined for insider trading

Nine directors of beleaguered United Airways BD, including its founder chairman, were slapped with fines of Tk 10 lakh to Tk 20 lakh for insider trading.

Insider trading is the buying or selling of a security by someone who has access to non-public information about the stock.

The nine directors had booked in profits by trading United Airways shares just before declaring price sensitive information, according to a press release of the Bangladesh Securities and Exchange Commission yesterday.

They had involvement in price manipulation of United Airways shares as well, said the statement.

Tasbirul Ahmed Choudhury, founder chairman and managing director of United Airways, and his wife Khandokar Taslima Choudhury were fined Tk 20 lakh each.

Tofael Ahmed Chowdhury, Tasbirul's brother, was fined Tk 10 lakh along with Ashiq Miah, Yusuf Chowdhury, Modhurish Ali, Siddika Ahmed, Khandokar Mahfuzur Rahman and Tahmina Begum.

Besides, United Airways investors Sayed Shirajuddowla, Abu Sadat Mohammed Sayem and Yaqub Ali were fined Tk 10 lakh each for price manipulation.

The BSEC has warned United Airways of showing inflated earnings per share by manipulating financial statement in 2012, according to the statement.

The decisions came at the regular commission meeting yesterday.

The company was downgraded to “Z” category last year from “A” category for having declared no dividend, according to the Dhaka Stock Exchange.

Listed with the DSE since 2010, United Airways stock traded at Tk 5.90 yesterday.

The aviation company has outstanding loans of about Tk 300 crore to financial institutions.

Earlier in June last year, the BSEC approved the company to raise capital of Tk 400 crore through private placement to purchase aircraft and repay loans.

Flights of United Airways have remained suspended from March 5 last year due to unavailability of serviceable aircraft.

The aircraft were grounded for maintenance, but the airline did not have enough funds to do the required servicing, which is a matter of high cost.

Established in 2007, the airline has 11 aircraft in its fleet: two Airbus 310-325, five MD-83, three ATR-72-212 and a Bombardier Dash-8 100.

It has permission to operate domestic flights to Chittagong, Sylhet, Jessore, Cox's Bazar, Rajshahi, Barisal, Saidpur and Ishwardi.

On the international routes, it has permission to fly to Dubai, Kuala Lumpur, Kathmandu, Kolkata, Jeddah, Bangkok, Muscat and Singapore.

Sponsors hold only 4.16 percent stake in United Airways, institutions 14.05 percent, foreign investors 12.18 and general investors the remaining 69.61 percent, according to DSE.

Also at yesterday's meeting, brokerage house M Securities Ltd and its management were fined for violating securities laws. It had provided margin loan to directors' relatives violating commission directive.

The BSEC fined M Securities Tk 20 lakh and its managing director Chowdhury Mohammed Nurul Azam and his wife Jakia Chowdhury Tk 10 lakh each.