IDRA Chairman Dr M Mosharraf Hossain, who is facing charges of insider trading, has been engaged in trading insurance stocks through two of his shell company's provident funds so it has surfaced.
The Ministry of Finance's Financial Institutions Division, upon high court order, has formed a committee to investigate the insider trading allegations against Mosharraf last week.
Surprising to many that the IDRA Chairman, once a stock market professional, could not resist his temptation to cash in on the high voltage volatility in Delta Life Insurance stock triggered by the series of dramatic events where the IDRA Chairman has been the key controller of the course.
Having insider knowledge of the administrator-run life insurer and full control over regulatory developments, Mosharraf, through three of the four funds under his control, bought more than 45,000 Delta Life Insurance shares in June 2021 and sold those off before the end of July, according to the evidential documents submitted before the high court by his opponent lawyers.
Delta Life shares ranged from Tk96 to Tk164 in the two months and in between the two months, the stock jumped dramatically on the Dhaka Stock Exchange.
Mosharraf was not reachable over the phone for a comment.
Abu Saleh Mohammad Amin Mehedi, a stock investor filed a writ petition last year challenging Mosharraf's services at the insurance regulator given the fact he concealed his directorship in two companies Loves and Live Organics Ltd and Gulshan Valley Agro Industries Ltd, where his wife Jannatul Mawa is also a director.
Registering employees' provident funds and gratuity funds of the two companies Mosharraf cashed in on the privileged allocation of primary shares in many initial public offerings alongside trading secondary market stocks worth cores of Taka, the petitioner's lawyers submitted proofs against their allegations while the High Court issued rules and instructions to relevant government authorizes responsible for the appointment of IDRA chairman, anti-corruption and anti-money laundering issues.
The Think-tank Centre for Policy Dialogue has long been stressing the transparency of stock market investment accounts to ensure no indirect insider or circular trading in the stock market—the most used ways to manipulate stock prices.
Documents suggest sitting at the top of the insurance regulator Mosharraf traded several insurance stocks –including Padma Life, Provati Insurance, Asia Insurance, Asia Pacific Insurance, Eastern Insurance, Rupali Life Insurance and Islami Insurance and most of these have witnessed abnormal price hikes in the bourses of Dhaka and Chattogram in the bull market of 2020-21, widely believed to be a consequence of price manipulations.
Mosharraf's acts in trading insurance stocks are a conflict of interest and apparently, insider trading, said the lawyers of the petitioner.
The four funds, where Mosharraf is the chairman of trustee committees, as eligible investors, subscribed to and availed primary shares of Sena Kalyan Insurance last year.
Mosharraf allegedly has also become a shareholder of Popular Life Insurance Company's asset management subsidiary PLI Asset Management.
He and a director of Trust Life Insurance Company allegedly had registered eligible investor funds to use them in privileged investing in primary shares, keeping the life insurance company in the dark.
However, the High Court bench of Justice Nazrul Islam Talukder and Justice Mustafizur Rahman on 17 April would see the details of the ministry investigation committee's findings regarding Mosharraf's stock trading alongside hearing what the ministry has been doing regarding his removal from the top post of the insurance regulator.
The Anti-Corruption Commission is investigating Delta Life entrepreneurs' allegation against Mosharraf that he asked for bribes from the company before the regulator suspended the board of directors and appointed an administrator in February 2020.