Shurwid Industries penalised for non-cooperation in investigation

Shurwid Industries Limited has been fined Tk2 lakh for non-cooperation by its sponsors, directors, and officials with the Dhaka bourse's inquiry team regarding allegations of insider trading.

The fine has been imposed after the investigation team faced difficulties in reaching the accused individuals despite making repeated attempts through phone calls and courier services, according to a report of the Bangladesh Securities and Exchange Commission.

The BSEC in June last year directed the Dhaka Stock Exchange (DSE) to investigate Shurwid Industries after a surveillance revealed possible insider trading from 30 April to 25 May last year. During the period, Shurwid shares surged by 54%, reaching Tk21.60 each.

In response to the commission's report, Mahmudul Hasan, chairman of Shurwid Industries, told The Business Standard that he had not received any letter or phone call from the bourse or the regulator.

He said they moved the office from Dhanmondi to Lalmatia and informed the DSE twice. If letters were sent to the old address, they wouldn't have received them.

Hasan added that if they had received the letter, they would have cooperated with the DSE inspection team.

Responding to BSEC's allegations, he said neither he nor his current officials were involved in insider trading,

In 2014, the company raised Tk14 crore through an initial public offering (IPO). Its factory has remained closed since 26 March 2020.

Hasan alleged that the IPO fund was embezzled by the company's former chairman Anis Ahmed and managing director Zahedul Hoque. In 2017, a change in Shurwid's management created hope among the investors.

In May 2018, the company decided to lower its paid-up capital to minimise its accumulated loss. But after failing to do so, Shurwid tried to diversify its business to generate more income.

The principal activity of Shurwid Industries is to manufacture PVC products. It also started Information Technology Enabled Service and software businesses.

Sponsors and directors now hold only a 12.01% stake in the company, while institutional investors hold 10.47%, and general investors 77.52%.

The last trading price of each share of the company was Tk14.30 on Thursday at the DSE.