Tk 75cr loss looms over UCB
FROM PAGE B1
Yesterday, the stock was traded at Tk 43. It is clear that UCB bought the share when the share price was at its peak.
When the price of a stock reaches an abnormally high level due to manipulation, the manipulators need to dump it fast, said Al-Amin, an associate professor of the Accounting and Information Systems Department of the University of Dhaka.
Institutional investors can work well as a dumping station as general investors cannot buy a large number of shares at a high price, he told The Daily Star last week.
“Here the bank was used for dumping. Some people of the bank may be involved who put pressure for the purchase of the shares to benefit the manipulators,” he said.
There are many examples of such cases where banks, NBFIs, and mutual funds were misused in the same way, said Al-Amin.
The bank officials or directors who are engaged in buying the stock are provided benefits through underhand deals for the gains of the manipulators, he said.
Meanwhile, the bank’s funds become stuck and it incurs a hit and the stock market loses liquidity, he added.
“It’s a nexus,” said Al-Amin.
A top official of a leading asset management company, preferring anonymity, said all investment decisions should be based on proper research.
No research can support the purchase of this share at such a high price and volume. “So, it is clear that it was bought to benefit someone,” he added.
Profits of Genex Infosys dropped 21 percent year-on-year to Tk 30 crore in the first nine months of the fiscal year 2023-24.
Its earnings per share stood at Tk 2.54 in the July-March period of the fiscal year that ended recently.
Commercial banks are largely funded by depositors’ money and thus have a fiduciary responsibility towards them and part of that responsibility involves taking prudent investment decisions and risk management practices, said Asif Khan, president of CFA Society Bangladesh.
“The investment in this case seems very large compared to the total portfolio size and thus raises some questions,” he added.
A top official of the bank, preferring anonymity, said the purchase decision was taken by the board of directors and termed a “strategic investment”.
Usually, it is the management team of a bank that sends such proposals to its board and then, based on it, the board either approves the proposal or declines it. Here, this banking norm was violated, he added.
Several top officials of the UCB confirmed to The Daily Star that the decision was taken by the board of directors under the influence of Anisuzzaman Chowdhury Rony, a former director of the bank.
Mohammod Monwar Hossain, head of the treasury department of the UCB, did not receive phone calls and a text message from The Daily Star last week for a comment representing the bank’s management team.
The Daily Star also tried to contact Rony several times. However, his mobile was found switched off.