BSEC opens fresh probe into Azad Patwary after Tk 2 crore market manipulation fine
Bangladesh's securities regulator has opened a fresh investigation into investor Md Azad Hossain Patwary's financial transactions and stock market activities, two weeks after fining him 2 crore taka for manipulating shares of Khan Brothers PP Woven Bag Industries.
The Bangladesh Securities and Exchange Commission (BSEC) ordered the inquiry on November 1 following intelligence received from the Bangladesh Financial Intelligence Unit (BFIU).
Investigators will examine the sources and destinations of large cash transactions linked to Patwary and people associated with him, including possible insider trading and market manipulation.
The probe will cover bank accounts held at scheduled banks and transactions conducted through stock dealers and brokerage houses.
BSEC has given the three-member investigation committee 60 working days to submit its findings.
The latest inquiry follows earlier investigations that identified suspicious trading patterns, arranged transactions and substantial gains from trading in Khan Brothers shares.
Financial intelligence triggers fresh scrutiny
The November 1 order reconstituted an investigation committee previously established on September 29, replacing its earlier mandate with revised terms of reference.
Mohammad Rakibur Rahman, a BSEC additional director, will lead the committee. Joint Director Md Shahnawaz and Assistant Director Md Matiur Rahman are the other members.
The inquiry has been authorised under Section 21 of the Securities and Exchange Ordinance, 1969, Section 17A of the BSEC Act, 1993, and provisions of the Money Laundering Prevention Act, 2012, as amended in 2015.
The regulator said information supplied by BFIU warranted a detailed examination of financial transactions to protect market integrity and investors.
The order does not disclose the value of the cash transactions under scrutiny or identify the related persons whose accounts will be examined.
It also does not establish that the transactions involved money laundering or insider trading. Those are matters for the investigation to determine.
Contacted by Daily Waadaa on November 2, Patwary declined to comment on the fresh investigation.
After confirming his identity and asking which newspaper the journalist represented, he said: "I will talk about this later."
Asked about the October 18 enforcement proceedings, he again said he would speak later.
BSEC spokesperson and Executive Director Md Abul Kalam confirmed the regulator's previous action against Patwary.
"Yes, this person was investigated in the past, and action/penalties were imposed against him for offences related to market manipulation," he told Waadaa.
Seven accounts, 21.87 crore taka in calculated gains
Patwary's trading in Khan Brothers shares has been under regulatory scrutiny since the Dhaka Stock Exchange flagged unusual transactions between September 19 and November 12, 2023.
A subsequent BSEC investigation examined trading between December 11, 2024, and March 24, 2025.
Investigators identified seven beneficiary owner (BO) accounts maintained in Patwary's name through brokerage houses including UCB Stock Brokerage, NCC Bank Securities and Financial Services, Mercantile Securities, EBL Securities and AB Securities.
The report examined transactions between those accounts, including trades that allegedly took place without a corresponding change in beneficial ownership.
BSEC identified arranged trading and aggressive purchases at higher prices, which it said created an artificial impression of market activity and influenced the share price.
The investigation calculated that Patwary made realised capital gains of 8.21 crore taka during the December 2024-March 2025 period.
That represented a gain of 22.22 taka per share, equivalent to 15.99% of the relevant cost.
The report also estimated unrealised gains of 13.66 crore taka on his remaining holdings, based on Khan Brothers' closing share price of 158.90 taka on March 24, 2025.
The unrealised gain amounted to 14.64 taka per share, or 10.35%.
Together, the realised and unrealised gains totalled approximately 21.87 crore taka, according to BSEC's calculations. The unrealised portion represented a valuation of shares still held, rather than profits actually received.
Khan Brothers shares traded between 122.50 taka and 159.30 taka during the period examined in the investigation.
The stock subsequently fell sharply, closing at 31.40 taka on October 26, 2026 — approximately 80% below the March 2025 closing price used in the regulator's unrealised-gain calculation.
On October 18, BSEC fined Patwary 2 crore taka for securities-law violations involving Khan Brothers shares.
Two other investors, Md Akter Hosen and Md Nasir Uddin Akond, were fined 1.8 crore taka and 1 crore taka, respectively.
The combined penalties totalled 4.8 crore taka, with the three investors instructed to pay within 30 working days.
The enforcement decision followed hearings conducted on the basis of investigation reports prepared by BSEC's Enforcement Division.
According to the regulator, transactions through the investors' BO accounts accounted for substantial portions of daily trading in Khan Brothers shares during several periods of rising prices.
The investors denied manipulating the market.
In written submissions, they described themselves as ordinary, long-standing investors who had traded shares in good faith to earn profits.
BSEC rejected their explanations, concluding that the securities-law violations had been substantiated and were intentional.
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