Ipo Controversy
DSE won’t enlist cos with irregularities
Dhaka Stock Exchange board has decided to not to enlist the companies approved by the Bangladesh Securities and Exchange Commission if there are major inconsistencies and violation of rules. The DSE board in a recent meeting made the decision as BSEC’s approval to some companies to raise capital through initial public offering has drawn concern and criticism among the investors.
Usually, the DSE enlists companies after the regulator approves IPO of the companies.
‘The board has decided to give its observation to the BSEC on the draft prospectus of the companies which raise capital through IPO,’ a DSE senior official told New Age last week.
He said, ‘The observation of the bourse will be more prudent as this time it will be sent after getting board’s appraisal.’
‘If it is found that the DSE’s major observation on the draft prospectus remains unaddressed in the approved prospectus, then the board may not enlist the company,’ the official said.
‘If the board continues to allow the BSEC’s unethical approval to the IPO, then once we will be liable to the investors,’ said DSE board director.
Asked, if the regulator issues directive to enlist a company, then what will be the bourse’s stance, the DSE director said that once regulator forced to enlist any company, then there would be no option for the bourse except enlisting it.’
But, such regulatory directive of enlistment will make the bourse free from its liability as all the liability will be on the regulator, he said.
The bourse has started the process of preparing its observation on the companies which are yet to be approved by the regulator, the official said.
The bourse, since its conflict with the BSEC regarding the bourse’s observation on Orion Pharma in 2011, closed the ‘expert panel’ department which was opened for preparing DSE’s observation on draft prospectus.
The expert panel included former BSEC chairmen, professors of universities and experts in accounting.
The DSE senior official said the bourse, after the closure of its expert panel, refrained itself from making any opposition on IPOs once it got approval from the BSEC.
For example, the DSE enlisted Shahjibazar Power Company Limited without raising any question despite the latter’s violation of companies act regarding its managing director and EPS calculation, he said.
Approval to the IPO of Khulna Printing and Packaging was the worst example of recent BSEC decision which had drawn criticism among the investors, the official said.
On the other hand, another recent meeting between the DSE and the proposed DSE Brokers Association of Bangladesh also
discussed the controversy regarding the IPO
approved by the BSEC in recent time.
It was decided that the DSE board will raise its concern to the securities regulator over some companies’ move to go public with fabricated financial disclosures, DSE sources said.
The BSEC officials said some 45 companies are presently awaiting the regulatory approval to go public.
-With New Age input
