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The Securities and Exchange Commission (SEC) has imposed restrictions on selling 79,150 shares of a private commercial bank (PCB) and 5,300 shares of another PCB bought by two directors of the respective banks through 'insider trading' two years back.
The stock market regulatory body in two separate directives Thursday also asked the banks to keep the shares under lock-in for the next two years.
The SEC in another directive Wednesday asked four directors of Wonderland Toys Ltd (WTL) to realise a loan worth Tk 29.50 million disbursed in favour of the company's chairperson and managing director in early 2003 within next two months and deposit the said amount in the WTL's bank account within the said period.
The SEC sources said both the bank directors made personal gains by purchasing the shares at lower prices ahead of dissemination of the banks' price sensitive information to the investors, stock exchanges and the regulatory body.
General investors were affected due to such insider trading banned strictly in the stock exchange transactions, SEC sources said.
One of the PCBs that came under the SEC action held two board meetings on February 28, 2004 and March 30,2004 to recommend 25 per cent stock dividend for its shareholders for the calendar year 2003.
On the other hand, another PCB against which the SEC took similar action held its board meeting on April 21,2004 to recommend 15 per cent stock dividend for 2003.
"This insider tradings were conducted to the detriment of the interests of investors in securities and were in breach of stock market discipline," the SEC directive said.
The banks which faced the SEC actions are Mercantile Bank and One Bank.
Meanwhile, the SEC investigation on Wonderland Toys Ltd said the company did not obtain shareholders' decision for the loan disbursed to the chairperson and managing director (MD) Quamrun Nessa in early 2003.
"The company and its board have deliberately diverted the fund illegally and without any lawful authority affecting the interest of the general shareholders," the SEC directive said.
Apart from Wonderland's MD Quamrun Nessa, the other directors who were directed to realise the entire amount of the loan are Farah Shad, Akbar Hossain and Mazharul Hannan.
The SEC also asked them to submit the original bank statement in favour of the deposit of the said money into the company's account within three working days of deposit of the money to the Commission.
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