Local merchant bank NRB Equity Management has been fined Tk 10 lakh for breach of rules while opening beneficiary owner's (BO) accounts and handling multiple clients under an omnibus.
Bangladesh Securities and Exchange Commission imposed the fine in a meeting chaired by its Chairman Prof Shibli Rubayet Ul Islam on Wednesday.
The stock market regulator also cautioned three other brokerages for breaking securities and exchange rules along with giving go-ahead to AFC Health's initial public offering (IPO).
Following an investigation, the commission found that NRB Equity Management opened 551 BO accounts without verifying the required documents.
The merchant bank also failed to open a distinct BO account against the omnibus accounts, operating around 307 BO accounts against a single beneficiary, which is a breach of the regulator's directives.
The fact that the company gets IPO proceeds through two BO accounts under an omnibus is also a breach of regulations.
Besides, the investigation found that these rules were broken with help of some well-placed officials within NRB Equity.
Meanwhile, AFC Health is planning to offload 1.70 crore ordinary shares to raise Tk 17 crore at face value.
With the IPO proceeds, the issuer will purchase various machineries and equipment and bear the IPO cost.
The company's per share net asset value was Tk 13.13 as of June 30, 2019, while earnings per share was Tk 1.47 for the last fiscal year.
Imperial Capital and CAPM Advisory was the company's issue manager.
To apply for an IPO, eligible investors should have at least Tk 1 crore invested in listed stocks from the day of subscription till its end.
Meanwhile, the BSEC formed a two-member enquiry committee in order to find the reasons behind the unusual price hike of GQ Ballpen.
The company's stocks skyrocketed to Tk 240 on Wednesday while it was just Tk 66 on July 7, DSE data shows.
At the same time, the BSEC froze 10 BO accounts that were allegedly involved in stock gambling. The accounts will remain frozen until the investigation is concluded.