Two businessmen acquitted of 1996 stock scam charges
The special tribunal for capital market lawsuits yesterday acquitted two businessmen who were accused in a case tied to the much-hyped 1996 share market scam.
The two acquitted were: A Rouf Chowdhury, the then chairman of Premium Securities, and Syed H Chowdhury, a director of the stockbroker.
Special Judge Akbar Ali Sheikh handed down the verdict as the charges against the two accused were not proven, said Masud Rana Khan, a lawyer for the Bangladesh Securities and Exchange Commission, which filed the case in 2002.
He said the BSEC will decide on filing an appeal against the verdict with the High Court after receiving the full judgment.
However, proceedings of two other accused in the case -- Moshiur Rahman, managing director of Premium Securities, and Onu Zaigirdar, a director of the stockbroker -- have been stayed by the High Court.
The BSEC had filed the case against Premium Securities and its directors in 1997 on charges of selling different companies' shares by violating securities rules in 1996.
The regulator had also filed another 14 cases against 34 individuals, eight listed companies and five brokerage firms on charges of manipulating share prices through fraudulent means in the same year.
Of the cases, 12 were stayed by the higher courts, and proceedings of only three cases had been continuing in the special tribunal, which gave the first verdict in one of the cases in August 2015.
In the maiden judgment, the tribunal sentenced two directors of Chic Tex to four years in prison for their involvement in price manipulation, and also fined them Tk 30 lakh each. In case of failure to pay, they were supposed to serve another six months in jail.
In the case of Premium Securities, the BSEC had alleged that the accused traded shares of Beximco Pharmaceuticals, Bata Shoes, Prime Textile and Mita Textile through fraudulent means between July and December 1996, according to the charge sheet, based on a government probe report on the scam.
In 1996, the share prices of listed companies soared abnormally, even by several hundred times, before the crash.
The share price index of the Dhaka Stock Exchange had risen to 3,648.75 points on November 5, 1996. The following day, it started falling and eventually came down to 462 points in May 1999.
After the price debacle, the government formed a probe committee in December 1996, headed by Aminul Islam, then vice-chancellor of Jahangirnagar University.
The committee submitted its report to the government on March 27, 1997, identifying a number of companies and some of the country's biggest brokers and influential individuals involved in market rigging.
On the recommendations from another probe panel on a fresh stockmarket crash in 2011, the Securities and Exchange Ordinance 1969 was amended in November 2012, empowering the government to set up special tribunals to try capital market-related cases.
The much-awaited special tribunal for the capital market began its judicial functions in July 2015 to quickly dispose of stockmarket-related cases.