Suspension Of Flight Operations
United Airways shareholders feel ‘cheated’
Suspension of operation of the United Airways has left its general shareholders, who hold 74.39 per cent stakes of the company, angry and some of them felt ‘cheated’ by the authorities’ decision. The sponsor-directors of the company hold only 8.44 per cent of total shares of 56.80 crore and institutional investors hold 17.19 per cent shares. The company bagged Tk 415 crore from the capital market through initial public offering and rights share in last four years.
The share prices of United Airways dropped by 5.93 per cent at the Dhaka Stock Exchange on Thursday, a day after the private airliner cancelled all its flights for an indefinite period due to operating capital inadequacy.
Shahidul Islam, an investor, said, ‘I have sold off all of my holding in United Airways following the company’s declaration of suspension of flights in fear of further losses.’
The capital market regulator should look into the matter and ensure tough action against United Airways’ management as the management has failed to continue smooth operation of the company, he said.
‘This is one kind of fraudulent activity with the investors by the management of the airline. It seems they are cheating us,’ he said.
He said that the closure of operation would only harm the general investors as the sponsor-directors had nominal stakes in the company.
Another investor Md Julkarnain said, ‘It seems like a trap set by the company to get investors shares in cheap ahead of the record date for the 10 per cent stock dividend as we have seen huge amount of buy orders today [Thursday].’
‘So, the authorities should look into the matter,’ Julkarnain said.
Mohammad Shohidullah, another investor, said, ‘Following the media reports on United Airways, I sold off my entire holding of United Airways’ shares at Tk 10.70 each. Later I noticed that a huge number of buy orders were on the board.’
United Airways at a press briefing on Wednesday announced the suspension of all its flights claiming financial crisis.
Following media reports on the flights suspension, investors sold United Airways’ shares aggressively in the first hour of trading when the shares of the company were traded at Tk 10.70 each from its Wednesday’s closing price of Tk 11.8 each.
The shares of United Airways, however, closed at Tk 10.90 each on the day, shedding 5.93 per cent.
Asked, a senior BSEC official told New Age, ‘The commission has nothing to do regarding the flights suspension of the company as it is an absolutely management issue and there is nothing that violates any of the
securities rules and regulations.’
‘But, the matter is obviously a price sensitive information. If the information was not disclosed duly to the stock exchanges, the commission will take proper action,’ he said.
Asked about the suspicious trade pattern of the day, the BSEC official said, ‘If we find anything wrong through our market surveillance software, we will obviously take regulatory steps.’
A total 2.76 crore shares of United Airways worth Tk 29.82 crore changed hands on Thursday amid heavy buying from the mid-trading session.
Dhaka Stock Exchange managing director Shwapan Kumar Bala told New Age that the bourse had already issued a letter to United Airways seeking clarification about the media report about it.
The bourse has no jurisdiction to take any step in this regard except seeking clarification, he said.
United Airways in 2009 raised Tk 100 crore from the general investors through an initial public offering and Tk 315 crore in 2011 through rights offering.
United Airways’ director Ahfaz Miah told New Age, ‘As we are trying to resume our operation as soon as possible, we would request our shareholders to keep patience.’
He declined to comment on the investors’ allegations about embezzlement of their money by the sponsor-directors.
‘We are trying to sort out our existing problems,’ he added.
The abrupt suspension of flights of the carrier has made the future of its 1,100 employees as well as its own destiny uncertain.
After Tasbirul Ahmed Choudhury’s resignation for managing director and chairman post on Monday, Mohammed Mahtabur Rahman, a director, was appointed chairman on the same day.
Besides, Shahinoor Alam was made acting managing director and Ferdous Imam acting chief executive officer, according to a posting on the DSE web site.
Despite the change in leadership, the new bosses could not take any visible step in the last three days to assure investors and shareholders as well as the anxious employees that things are under control.
The airline owes about Tk 100 crore to the Civil Aviation Authority Bangladesh in navigation, over flying and aeronautical and non-aeronautical fees.
The CAAB declined to renew the licence of the airlines over the unpaid bills. The civil aviation ministry intervened, and the airline has had its air operator certificate renewed for 10 months in August.
Set up in 2007, the airline now has 11 aircraft — two Airbus 310-325, five MD-83, three ATR 72 and one DASH-8 100.
It operates domestic flights to Chittagong, Sylhet, Jessore, Cox’s Bazar, Barisal, Rajshahi, Saidpur and Ishwardi.
On the international routes, it flies to London, Dubai, Kuala Lumpur, Kathmandu, Kolkata, Jeddah, Bangkok, Muscat and Singapore.
-With New Age input
