Shakib in spotlight again, for all the wrong reasons

Cricket icon Shakib Al Hasan is once again in the spotlight as his name has come up in probes into stock manipulation.

Bangladesh Securities and Exchange Commission (BSEC), the stock market regulator, carried out four probes between May 5 last year and March 10 this year.

According to the probe reports, Shakib on several occasions traded a "huge number of shares" on Dhaka Stock Exchange when market manipulation took place.

The BSEC held responsible a high-up of Monarch Holdings, of which Shakib is the chairman, for manipulating share prices over the last two years. Monarch Holdings started its journey as a brokerage firm on October 19, 2020.

The regulator fined the firm's Managing Director Sadia Hasan, her husband Abul Khayer and their several relatives Tk 8.8 crore for violating the rules and influencing the share prices of Fortune Shoes, BDCOM Online, NRB Commercial Bank and One Bank through serial trading.

Shakib's name cropped up as a significant trader during these share manipulations. The BSEC, however, didn't recommend any action against him.

Serial trading, which is prohibited by the securities rules, refers to the purchase and sale of shares between the accounts of the same beneficiary owner (BO) aimed at impacting the share price.

The BSEC found that Abul Khayer influenced the stock price of Fortune Shoes by selling and buying its shares among his associates in a large volume from May 20 to June 17 last year. As a result, the stock price almost doubled in the 20 trading days.

Shakib was among the top buyers of Fortune Shoes shares during the period. He purchased 35.3 lakh shares and sold 3.83 lakh shares at the same time through his BO accounts, according to one of the four BSEC probe reports.

The premier all-rounder is no stranger to controversy. He was banned by the International Cricket Council in 2019 for a year for failing to report a corrupt approach by a bookie. He came under scrutiny for his involvement with Betwinner News, a sister concern of betting site Betwinner, in August this year. He later terminated the contract as betting or promoting is illegal in Bangladesh.

Shakib also bought 75 lakh shares of One Bank and sold 10.2 lakh of those when Abul Khayer and his associates indulged in serial trading and influenced the stock prices from November 15 to November 30 last year.

During the 15 days, the share price of One Bank rose 59.5 percent.

He also bought 27 lakh shares of NRB Commercial Bank and sold one lakh shares when the price was manipulated by DIT Co-Operative, of which Abul Khayer is the chairman, according to another BSEC report.

The bank's share price soared 172 percent between May 5 and May 24 last year.

Besides, DIT Co-Operative was the key manipulator of the BDCOM Online stocks as it carried out serial trading to influence the stock prices.

BDCOM Online's share price rose 45 percent within just four trading days from March 7, 2022, according to a BSEC probe.

Shakib's Monarch Holdings was the fifth top buyer with a purchase of 25 lakh shares of BDCOM Online.

His company logged an unrealised gain of Tk 8.57 crore in a span of four days, the probe report said.

Unrealised gains mean an increase in the value of an asset or investment that an investor has not sold, according to Investopedia.

Seeking anonymity, a former chairman of the BSEC said the trade pattern clearly shows that Shakib traded a big volume of shares when serial trading was going on to influence the stock price.

His decision to buy those shares, which matched with those of the  manipulators, four times is abnormal.

"Coincidence does not happen four times," added the ex-BSEC chairman.

Despite repeated attempts, Shakib could not be reached for comments. This newspaper called him six times between 11:00pm on Tuesday and 4:50pm yesterday but his phone was found switched off.

Text messages were sent to his mobile phone and also his Facebook account but he was yet to give any reply.

Contacted, Mohammad Rezaul Karim, spokesperson for the BSEC, said the investment decisions might not have been taken by Shakib.

"It might be the case that Shakib gave the power of attorney to others [for trading shares] and he wasn't aware of the investment decisions," he said.

Asked why Shakib was not penalised, Karim came up with a rather vague reply: "The BSEC takes action based on trading pattern, investors' reply and other related issues. Similar types of punishment don't apply to everyone whose name comes up in a report."