Stocks
Emerald Oil Executives Quietly Selling Shares, Bypassing Legal Mandates
The Bangladesh Securities and Exchange Commission (BSEC) has mandated prior announcements for share acquisition or sale by entrepreneurs and executives of listed companies. However, circumventing this regulation, the entrepreneurs and executives of Emerald Oil Industries Limited, a listed company, have acquired shares without any formal declaration. They discreetly purchased shares at a lower price and later sold them at the highest market value, causing significant losses for ordinary investors. This incident has raised concerns about securities law violations and exploitation of investors, as reported by sources connected to the market. This information has been gathered from the Dhaka-Chittagong Stock Exchange (DSE-CSE) and reliable sources.
It has been revealed that the entrepreneurs and executives of Emerald Oil have purchased shares at a lower price without making any announcement and later sold them at prices increased up to Tk 188.80, causing substantial losses for ordinary investors. This has resulted in significant financial setbacks for regular investors. At one point, without declaring any intention to repurchase shares at a lower price, multiple entrepreneurs and executives of the company acquired shares, further impacting institutional and general investors. Currently, approximately 60% of the company’s total shares are held by entrepreneurs and executives.
On the other hand, ordinary investors claim to have fallen victim to a major scam, alleging that shares were purchased at a lower price without any announcement and then sold at an increased price, deceiving ordinary investors. The cycle of duping ordinary investors continues as shares are being acquired again at a lower price without any public declaration.
According to sources, there has been a significant change in the shareholding of Emerald Oil in the last month in the food and allied sectors. The share of entrepreneurs and executives in the company has increased to 21.35%. On the contrary, the share of institutional and general investors has seen a substantial decrease. However, there is no information on the increase in the shareholding of entrepreneurs and executives on both stock exchanges in the country. Investors are alarmed by the ongoing transactions of share purchase and sale without any formal announcement.
According to DSE sources, it has been observed that as of December 31, 2023, the share of entrepreneurs and executives in the company was 38.26%. However, by January 31, 2024, this share has surged to 59.61%. In other words, within one month, the share of entrepreneurs and executives in the company has increased by 21.35%.
Additionally, on December 31, 2023, the share of institutional investors in the company was 12.26%, and the share of general investors was 49.48%. However, by January 31, 2024, the share of institutional investors has decreased to 6.97%, and the share of general investors has decreased to 33.42%. In essence, within one month, the company has experienced a reduction of 5.29% in the share of institutional investors and a reduction of 16.06% in the share of general investors.
Furthermore, investors have alleged non-payment of declared dividends against the company. In the past year, the company had announced a total cash dividend of 10%, including an interim dividend of 5% for investors. The approval for this dividend was obtained from the shareholders of the company. However, the payment has not been made within the stipulated time for the declared dividend.
According to the directives of the regulatory authority BSEC, companies must distribute declared dividends to investors within 30 days of obtaining approval during the Annual General Meeting (AGM) of the Board of Directors. In this regard, the BSEC issued an order on January 14, 2021, stating that companies must deposit the declared dividends as a bonus (BD) within the 30-day approval period. Failure to comply will result in penalties and legal consequences for the company.
Despite the regulatory directive, the company has not distributed the declared dividends to investors as bonus shares in the food and allied sectors. The deadline for transferring the funds of these declared dividends was January 25 of the current year.
On the other hand, after reviewing the financial report of the concluded fiscal year as of June 30, 2023, the management of Emerald Oil declared a total cash dividend of 10%, including an interim dividend of 5%. The record date for this dividend was November 29 of the same year, and the AGM was held on December 27. The declared dividend was approved for all shareholders, including previous entrepreneurs and executives whose shares were beyond 30.45%. Despite the passage of the stipulated time, the company has not conveyed the amount of the declared dividends to the investors. In this situation, investors are seeking financial compensation, and the regulatory authority BSEC is considering intervention against the company for non-compliance and possible market manipulation related to the company’s shares. Additionally, allegations of manipulation regarding the company’s share prices have persisted for an extended period.
Reviewing the U.S. Stock Markets, the Nasdaq Composite, recorded a decent loss of 1,023 points, reaching a closing value of 16,690 points by the end of the week. Similarly, the S&P 500 index showed a positive trend, losing 240 points to settle at 5,408 points. Meanwhile, DJIA Index experienced a notable hike, adding 1,218 points during the week and concluding at 40,345 points after a week of gaining.
In contrast, Russell 3000 Index saw a loss in week performance, with a slight drop of 141 point to reach 3,077 points by the end of the week.
Moving to Russell 2000 Index, demonstrated a notable lost of 126 points, ending the week at 2,091 points.
In the Outgoing week, the European stock market displayed a mixed performance.
Here is the data on the weekly performance of the European Stock Market, The STOXX Europe 600 index, which is considered a leading benchmark for the European market and covers approximately 90 percent of the market capitalization across 17 countries, reported a loss of 18.49 points to close at 506.56.
The United Kingdom’s FTSE 100, one of the most widely followed indices in Europe, also showed a significant drop, losing 195 points or finishing the session at 8,181.
In Germany, the DAX 30 index, added by 605 points to reach 18,301, while France’s CAC 40 decreased by 278 points to stop at 7,352 at the end of the trading day.
Italy’s FTSE MIB, which covers the top 40 stocks traded on the Milan Stock Exchange, decreased by 1,081 points to 33,291. However, Spain’s IBEX 35, lost by 228 points, to close at 11,173.
A review of South Asian stock markets shows that India’s Bombay Stock Exchange (BSE) index BSE Sensex has lost 1,182 points during the week. At the end of the week, the index stood at 82,365 points. On the other hand, the Nifty-50 index of the country’s National Stock Exchange dropped by 383 points last week. At the end of the week, the index stood at 24,852 points.
Pakistan Stock Exchange Index ‘KSE 100’, added 459 points last week. After a week of losing, the index settled at 79,002 points.
On the other hand, The Sri Lankan stock market index loss, and the Colombo Stock Exchange index ‘ASPI’ decreased by 94 points in a week. After a week the index settled at 10,775 points.
Bhutan’s stock market index ‘BSI’ dropped by 9 points hence the index stood at 1,500 points throughout the whole week. Nepal’s ‘NEPSE’ lost 22 points, therefore the index stands at 2,727 points.
Hence Dhaka Stock Exchange: The benchmark index ‘DSEX’ lost by 75.77 points or 1.31 percent, in the outgoing week. At the end of the week, the index stands at 5,728 points.
