The Bangladesh Securities and Exchange Commission on Tuesday fined FAR Chemical Industries Limited and its issue manager, First Security Services Limited, Tk 5 lakh respectively for hiding directors’ information in the initial public offering documents.
The capital market regulator made the decision in a regular commission meeting presided over by its chairman M Khairul Hossain.
Former Bangladesh Securities and Exchange Commission chairman Farook Ahmed Siddiki told New Age, ‘The commission’s decision to penalise the issuer company and its issue manager is good and praiseworthy. But, the fine amount is small.’
He also said that the fine could have been a substantial amount.
BSEC officials, however, declined to make any comment in this regard.
BSEC sources said FAR Chemical Industries provided false information in its initial public offering documents regarding its directors.
They said some directors of FAR Chemicals were holding the directorship post of RN Spinning Mills.
The directors of the company are now facing criminal cases in connection with their forgery in raising capital for RN Spinning Mills while offering rights shares.
In January 2012, the directors of RN Spinning had raised fund from the investors offering rights shares without submitting their fees against their shares.
But, the company had later submitted false bank document showing that the directors’ of the company had submitted rights offering subscription fees duly.
Later the company, following a BSEC query, had said that the documents were not produced by them.
Following the manipulative activities, the commission in October 2012 had filed a criminal case against the company and its directors.
The share price of FAR Chemicals increased by 419 per cent or Tk 41.90 on its debut trading at the Dhaka Stock Exchange on July 8 despite a fall in the company’s profit in the latest financial statement.
The BSEC allowed the company to raise Tk 12 crore floating its 1.20-crore shares through an initial public offering with an offer price of Tk 10 each share.
The earning per share of FAR Chemical Industries was Tk 5.01 while net asset value per share was Tk 15.55 last year as per the company’s audited financial statement for the year ended on June 30, 2013.
The issue price of each share of the company was set at Tk 10.
-With New Age input
