SEC to probe Navana CNG share trade

The Securities and Exchange Commission yesterday formed a probe committee to investigate 'unusual' share trading of Navana CNG, which received a bonanza from the market through offloading shares directly within a record low time.
The stock market regulator also asked the committee to submit the probe report within October 8.
The two-member body, headed by SEC Executive Director ATM Tariquzzaman, was formed after the market watchdog observed unusual trade of the company's shares in the stock exchanges through designated brokers into the first five trading days of listing.
The other committee member is SEC Director Mohammad Rezaul Karim.
ICB Securities Trading Company and Sharp Securities were the designated selling agents for Navana CNG.
“The commission formed the probe committee to find out whether there were any irregularities or manipulation,” said an SEC high official.
Navana CNG Ltd, a sister concern of Navana Group, debuted on the stock exchanges on August 30 under direct listing method and it offloaded a major portion at high prices in the first five trading days.
It sold half of its shares, or 1.81 crore ordinary shares of Tk 10 each, within just seven trading days.
On the first day, the price of a Navana CNG share rose as high as Tk 270 before closing at Tk 190.48.
The average price of the shares was between Tk 200 and Tk 205 in the first five days.
The CNG (compressed natural gas) conversion and re-fuelling company received a bonanza of around Tk 360 crore against Tk 18 crore shares.
The hefty gains made by the private company also prompted Dhaka Stock Exchange to decide against allowing any other private company to join the bourses under direct listing system.
The DSE at a board meeting on Tuesday decided that no companies except the government-owned ones will be listed directly on the stock exchanges.
Earlier, two other private sector companies -- Shinepukur Ceramics and ACI Formulations -- also made hefty business by offloading shares under direct listing system.
To protect such an unusual flight of capital from the market, a special committee formed by the SEC had recommended some amendments to the existing direct listing rules.
But neither the SEC nor the DSE took initiatives to bring changes in the direct listing method based on the recommendation.
Besides the three private companies, five government entities -- Desco, Power Grid, Jamuna Oil, Meghna Petroleum and Titas Gas -- were listed directly on the bourses.
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