IDRA Chairman implicated in insider trading on stocks including Delta Life!

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IDRA Chairman Dr M Mosharraf Hossain, who faces insider trading charges, engaged in insurance stock trading through two of his company’s provident funds screen, which surfaced.

The Financial Institutions Division of the Ministry of Finance, by order of the High Court, formed a committee to investigate allegations of insider trading against Mosharraf last week.

Astonishing to many that the IDRA Chairman, once a stock market professional, could not resist the temptation to take advantage of the high volatility in Delta Life Insurance shares triggered by the dramatic series of events where the Chairman of IDRA was the main controller of the course.

With insider knowledge of the director-run life insurer and full control over regulatory developments, Mosharraf, through three of the four funds under his control, purchased more than 45,000 Delta Life Insurance shares in June. 2021 and sold them before the end of July, according to the supporting documents filed in the high court by his opponent’s lawyers.

Shares of Delta Life ranged from Tk 96 to Tk 164 over the two months and between the two months the stock jumped dramatically on the Dhaka Stock Exchange.

Mosharraf could not be reached by phone for comment.

Abu Saleh Mohammad Amin Mehedi, an equity investor, filed a lawsuit last year challenging Mosharraf’s services to the insurance regulator, as he hid 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 the employee provident funds and gratuity funds of both companies, Mosharraf cashed in the preferred allotment of primary shares in numerous initial public offerings alongside trading in secondary market shares worth Taka cores, the petitioner’s lawyers presented evidence against their allegations while the High Court issued rules and instructions to the relevant government authorities responsible for the appointment of the IDRA Chairman, anti-corruption and anti-money laundering matters.

The Think-tank Center for Policy Dialogue has long insisted on the transparency of stock market investment accounts to ensure the absence of indirect insiders or circular trading in the stock market – the most widely used means of manipulating stock prices. .

Documents suggest he sat 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 them experienced abnormal price increases in the stock exchanges. Dhaka and Chattogram in the 2020-21 bull market, widely seen as a consequence of price manipulations.

Mosharraf’s actions in trading insurance stocks constitute a conflict of interest and, apparently, insider trading, the petitioner’s lawyers said.

The four funds, where Mosharraf is the Chairman of the Boards of Trustees, as eligible investors, subscribed and used core shares of Sena Kalyan Insurance last year.

Mosharraf also reportedly became a shareholder in Popular Life Insurance Company’s asset management subsidiary, PLI Asset Management.

He and a director of Trust Life Insurance Company reportedly saved funds from eligible investors for use in preferred investments in major stocks, keeping the life insurance company in the dark.

However, on April 17, the High Court bench, consisting of Judges Nazrul Islam Talukder and Judge Mustafizur Rahman, would see the details of the findings of the ministry’s investigative committee regarding Mosharraf’s stock trading and hear what the ministry had done regarding his dismissal from the top job in insurance. regulator.

The Anti-Corruption Commission is investigating Delta Life contractors’ allegation against Mosharraf that he demanded bribes from the company before the regulator suspended the board and appointed a director in February 2020.

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