The stockmarket regulator has formed a panel to investigate the unusual price decline of Titas Gas Transmission and Distribution Company's shares.
The panel consists of two officials of Dhaka Stock Exchange who will have to submit a report to Bangladesh Securities and Exchange Commission within the next five working days, according to a statement.
BSEC took the decision at a meeting yesterday after the state-run energy company's share prices plunged around 30 percent in just the last nine trading days.
The share price of Titas Gas came down to Tk 49 yesterday though its price never dipped below Tk 60 in the last two years.
The sudden fall in prices attracted the attention of many and prompted the regulator to go for the inquiry.
There were also allegations of insider trading, centring the company's dividend recommendation and first quarter earnings declaration.
The anticipation of lower dividends and a fall in first quarter earnings came true after a board meeting of Titas Gas on Tuesday afternoon.
Titas Gas has recommended only 15 percent cash dividends for 2014-15, the lowest since its listing on the stock exchanges in 2008, while its earnings per share (EPS) for July-September this fiscal year came down to Tk 1.57, from Tk 2.37 in the same time last fiscal year.
A Titas Gas official said re-fixing the net profit distribution margin following the new tariff structure for gas consumption, which was set by Bangladesh Energy Regulatory Commission in August this year, had a negative impact on the EPS.
“The net profit distribution margin has been reduced by 33.72 percent,” said Sankar Kumar Das, finance director of Titas Gas.
It means if Titas Gas was receiving Tk 100 as net profit last year, it will get Tk 33.72 less this year.
When asked about insider trading, he said it is a regulatory matter and the regulator will look into it.
Insider trading is a form of share transaction carried out for profit or to avoid loss on the basis of price sensitive information that has not been disclosed in public.
The government owns a 75 percent stake in Titas Gas, while institutional investors own 16 percent and the general public 9 percent.