Bangladesh Securities and Exchange Commission on Tuesday tightened the initial public offering and rights shares rules in a bid to curb misuse of funds by the listed companies.
The BSEC also withdrew 30-day share selling obligation for the placement shareholders, other than sponsor shareholders or directors, after their lock-in period is over.
The decisions were taken at a regular meeting of the commission headed by BSEC chairman M Khairul Hossain.
A BSEC press release said the status report of fund utilisation must be audited by foreign affiliated auditors for IPO, repeat public offering and right share issue.
It said the companies have to submit the report on a quarterly basis to the commission which will be signed by the board of directors.
BSEC officials said the commission initiated tightening the rules following a trend of misuse of funds by the listed companies.
They said as the funds were misused, or not used for the purpose mentioned in the IPO prospectus, the
company might fail to fulfil the possible business potentials which eventually affects the investors.
At the same meeting, the BSEC decided that the placement shareholders will have no obligation to sell their lock-in shares within 30 days after announcing expiry of the lock-in period. ‘And those who already took the commission’s permission for such share selling, but failed to complete within 30 days will also enjoy the same facility,’ said the BSEC release.
-With New Age input