Ruling Awami League lawmaker AHM Mustafa Kamal and his family members have moved to sell off their entire shares in the much-talked-about CMC Kamal Textile Mills Ltd, which is listed with the Dhaka Stock Exchange, to a local group of companies.
Mustafa Kamal, who is commonly known as Lotus Kamal, has recently applied to Bangladesh Securities and Exchange Commission to allow Kamal and six other sponsor-directors and sponsors to sell 26.14 per cent shares of the company, said the commission sources.
Kamal, who is also the chairman of the parliamentary standing committee on finance ministry and vice-president of the International Cricket Council, and his family members hold 26.14 per cent shares of CMC Kamal while the rest of the shares are held by general investors.
Industry insiders said that if the BSEC gave approval, the shares would be sold to Alif Group, which is engaged in tobacco, real estate, brick manufacturing and poly fibre businesses and other trading activities.
The Alif Group has already bought two other companies of Kamal which are Lotus-Kamal Knitwear Ltd and LK- Unitex Co Ltd, they said.
After the present AL–led government came to power in 2009, CMC Kamal came into limelight during the boom of share market in 2010 and subsequent crash amid alleged massive manipulation in the market.
A government probe committee, headed by Krishi Bank chairman Khondker Ibrahim Khaled, on the stock market crash of 2010-2011, found that share price of CMC-Kamal Textile Mills was sixteen times its face value in 2010 although the company suffered loss in the previous year.
The company suffered a loss of Tk 40 lakh in first quarter of 2009 when its earning per share was Tk 2.61 in the negative.
CMC-Kamal, however, declared 10 per cent dividend for the shareholders at the end of 2009, according to a case study of the probe committee.
In the first quarter of 2010, the company’s share value skyrocketed to Tk 1,600 — sixteen times the face value.
The probe report said that taking the opportunity of the market boom, Kamal and his family members sold shares worth around Tk 20.50 crore in 2010.
Following repeated market crash, the share price of CMC Kamal has now come down to Tk 26 with a face value of Tk 10 (or the price stands at Tk 260 if the face value of Tk 100 in 2010 is considered).
Kamal, however, denied any wrongdoing and continued to claim in last three years that he and his family members did not sell any shares during the boom.
Kamal on Tuesday said that none could prove that he was guilty of stock manipulation as he was not involved in any manipulation.
When he was asked why they moved to sell their stakes in CMC Kamal Textiles, Kamal told New Age on Tuesday, ‘We have decided to sell off the entire shares as it has become tough for me to manage time for the company as I have to give time for ICC and for my political activities.’
He said that his daughters were not interested in textile business.
‘If BSEC gives approval, Alif Group will buy the entire 26.14 per cent shares of the company and they will also buy more shares form the stock market to comply with the BSEC directive that made 30 per cent share holding mandatory for the sponsors-directors of every listed company,’ he added.
Officials of BSEC said that although Kamal applied to BSEC in November 4, 2012, the commission only recently started to move the file and sought the Attorney General’s advice on some of the waivers that Kamal wanted for selling the shares.
As per BSEC rules, no sponsor-director can sell any share if the sponsor-directors of the company jointly hold 30 per cent of the total paid-up capital of the company.
As Kamal and his family hold 26.1 per cent shares, they sought exemption from the rules.
They also sought exemption from the rules of lock-in of shares subscribed through rights share issuance.
‘As per the existing rules and regulations of the Bangladesh Securities and Exchange Commission, we could not allow them to transfer shares,’ a senior BSEC official told New Age.
‘We will make our decision after getting opinion form the Attorney General’s office,’ he added.
-With New Age input
