On February 22, 2017, Central Pharma-ceuticals informed through the Dhaka Stock Exchange that its sponsors' shares will be bought out by the directors of Alif Group gradually through the block market.

The news was met with much cheer by the general investors, who forecasted the change in ownership and management would bring better performance from Central Pharmaceuticals. Subsequently, its share price soared from Tk 13.6 to Tk 36.1 in a space of four months.

This prompted two opportunistic directors of Central Pharmaceuticals Md Rukunuzzaman and Parvez Ahmed Bhuiyan to stealthily sell off 18.85 lakh and 19.83 lakh of their shares respectively to the general public -- instead of Alif Group as agreed. In the process, the two made a killing. Rukunuzzaman and Bhuiyan had sold off their entire holdings in Central Pharmaceuticals without informing the DSE, breaching the Listing Regulations 2015. Not only that, the selloff brought down sponsors' shareholding in Central Pharmaceuticals to 25.89 percent, in another violation of the law.

As per a directive of the Bangladesh Securities and Exchange Commission, the sponsors of a company must hold 30 percent of the shares at any given moment.

Meanwhile, on November 6 last year, in another post on the DSE website, Central Pharmaceuticals informed that the share purchase agreement has been scrapped due to long delays by Alif Group.

The news sent Central Pharmaceuticals' share price tumbling to Tk 15, which is more or less the same level before the company had made its first announcement on the DSE website in February last year.

The episode provides a stunning example of how some rogue players gaming the system and getting away with it -- in the absence of strict monitoring and penalties by the regulator. Md Kamal, an official of the share department of Central Pharmaceuticals, said the two directors remain out of reach. Central Pharmaceuticals does not know how and to whom they sold off the shares, he added.

Some sponsors have deceived the general shareholders by disseminating the news of the ownership change, said Abu Ahmed, a former chairman of the Dhaka University's economics department. “But no one even asked them why the ownership change plan fell through,” he added.

Directors selling shares without making any disclosure beforehand is a breach of law, said Saifur Rahman, executive director of the BSEC, adding that action will be taken against them.

“If the regulator instructs us, we would take actions,” said KAM Majedur Rahman, managing director of the DSE.

Azimul Islam, managing director of Alif Group, could not be reached.

When the ownership change plan was announced, Central Pharmaceuticals Managing Director Munsur Ahamed had said a pharmaceutical company needs huge investment to be fully compliant and Alif Group has the financial strength to do it and make it an export-oriented company.

Central Pharmaceuticals was established by Getco/BanglaCAT in the 1980s. In 1993, Metro Group purchased it. A few years later, Metro Group sold the company to Ahamed.