The Bangladesh Securities and Exchange Commission (BSEC) has blamed the Dhaka Stock Exchange (DSE) for the dip in ACI Limited’s stock prices, and subsequently the market’s main index, citing the premier bourse’s inability to keep the investor’s confidence.
In mid-February last year, the DSE formed a committee to investigate why ACI Logistics Limited and Swapno, two of ACI’s subsidiaries, have been incurring enough losses to eat into the profits of their parent company.
The BSEC found that the DSE’s investigation and subsequent reports published by newspapers in the aftermath disheartened investors, which ultimately led to the drop in ACI stock prices.
In that regard, the stock market regulator issued a show cause notice last week, asking why appropriate action should not be taken against the managing director, chief regulatory officer and board members of the DSE.
An enquiry committee of the BSEC, which was formed to find the reasons behind unusual price fluctuations of a few listed companies, issued the notice.
ACI’s market price decreased by 33 between December 2018 and June 2019, which was during the DSE’s investigation.
“The drastic fall of securities has huge impact on the recent decline in the index as ACI is a large cap securities listed with the DSE,” according to the BSEC committee.
The aforementioned negative statistics regarding financial statements was the main reason behind the downward trend of ACI share prices, the BSEC committee said, adding that a few ACI directors and committee members have issued statements to the press on the matter.
However, ACI’s share prices were already slipping ahead of the investigation. ACI stock prices dropped to Tk 107.7, or by 25.07 per cent, between February and December 2018.
ACI’s share price fell as the company incurred losses in the recent times whereas it was once a high profit company, according to market analysts.
ACI’s earnings per share was negative Tk 12.20 during the July-December period of 2019. It was Tk 0.05 for the same period in 2018.
In a letter, the BSEC said that the DSE and its directors do not have the jurisdiction to form or conduct any investigation on any listed company as per securities law.
The DSE may inspect a company with the BSEC’s approval. However, since no approval was sought, it was clearly in breach of regulations.
Moreover, DSE directors ignored the code of conduct by conducting such an investigation before going on to disseminate their findings to the media, the BSEC letter said.
The BSEC has now requested DSE representatives to appear at a hearing personally or through other authorised personnel next Sunday at the Securities Commission Bhaban in Agargaon.