Verdict on share price scam due Monday

The special tribunal for capital market lawsuits may deliver a verdict on Monday in a case related to share price manipulation of BD Welding Electrodes.

The case involves SM Nurul Islam, managing director of BD Welding Electrodes, and Enayet Karim, editor of The Daily Industry, formerly known as Weekly Industry.

Bangladesh Securities and Exchange Commission filed the case in 2007 after an investigation found their involvement in the company's share price manipulation. The Dhaka Stock Exchange also investigated the case.

Enayet Karim communicated with BD Welding from the newspaper office through an email pretending to be Saudi Arabia's Al Awad Group, expressing interest to invest, according to probe reports.

BD Welding then informed the bourses that Al Awad had expressed interest via an email to install a joint venture oxygen plant in Chittagong and the Saudi group was about to make a visit in March 2007. The announcement boosted prices of the company to Tk 42.5 from just Tk 6.9 three months prior to that.

Al Awad, however, did not make any such visit to BD Welding, according to the probe.

Meantime, the Weekly Industry published a report that Al Awad Group was interested in forming a joint venture with BD Welding.

The probe found that the news was published in collaboration with the managing director of BD Welding, which had been listed on the stock exchanges since 1999.

Before that, Karim bought 20,500 shares of BD Welding at Tk 6-7 between December 6, 2006 and February 4, 2007. He also bought 1.72 lakh shares of the company at Tk 6-13 between December 14, 2006 and February 8, 2007.

Later, he sold the shares at Tk 33-34 on February 4, 2007, and then again on February 8 at Tk 46 per share, making the windfall profits.

On the DSE yesterday, each BD Welding share traded between Tk 24.2 and Tk 25.4, before closing at Tk 24.5.

The special tribunal, which has been formed for quick disposal of stockmarket-related lawsuits, has already completed hearing on the case.

Judge Humayun Kabir on August 3 sentenced Mahbub Sarwar, a manipulator, to two years in prison for illegally influencing the stockmarket through blogs and websites.

After recommendations from another probe report on the stockmarket crash of 2011, the Securities and Exchange Ordinance 1969 was amended in parliament in November 2012, empowering the government to set up special tribunals to try such cases.

The much-awaited special tribunal for the capital market began its judicial functions in June to quickly dispose of the stockmarket related cases.