2007 stock scam
Two jailed for 3 years
A special tribunal for capital market lawsuits sentenced the managing director of BD Welding Electrodes and one other to three years in jail for manipulating share prices of the company. Judge Humayun Kabir handed down the order to SM Nurul Islam, managing director of BD Welding Electrodes, and Enayet Karim, editor of The Daily Industry. The special tribunal was formed for quick disposal of stock market-related lawsuits. The Judge also fined Tk 20 lakh each. If the fine is unpaid, then the convicts have to be in jail for more six months.
Bangladesh Securities and Exchange Commission filed the case in 2007 after an investigation found their involvement in the companys share price manipulation. The case was also investigated by the Dhaka Stock Exchange.
Enayet Karim communicated with BD Welding from the newspaper office through an email pretending to be Saudi Arabias Al Awad Group and expressed interest to invest in the company, said the probe report.
BD Welding then informed the interests of the Al Awad company that it wants 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.
However, the Al Awad company did not make any visit to Bangladesh. Meanwhile, 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. This company has been listed in the stock exchange since 1999.Before the rise of share prices, 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 fortunes in a matter of days.
