Home ›› 04 Oct 2022 ›› Front
The Chittagong Stock Exchange (CSE)’s strategic investor approved by the securities regulator is ABG Limited, which is a newly formed company led by one person.
On September 28, the Bangladesh Securities and Exchange Commission (BSEC) conditionally approved the CSE’s proposal to sell its 25 per cent stake to ABG Limited in line with the demutualisation process.
On February 27, the company was registered with the Registrar of Joint Stock Companies and Firms (RJSC).
ABG’s paid-up capital is Tk 5 crore, and the number of total shares is 50 lakh. Of the total shares, 49, 99,999 shares are held by its Chairman and Managing Director Sayem Sobhan Anvir, also the managing director of Bashundhara Group. ABG Limited Company Secretary Shahriar Molla holds the rest of only one share, according to The Business Post’s investigation.
Yet, ABG did not violate the Companies Act or the Demutualization Act, but market insiders remained skeptical about the company’s capacity.
A top BSEC official told The Business Post, the commission already investigated the matter and found some weaknesses of ABG Limited.
That’s why, the BSEC tagged some conditions to the CSE for picking up ABG as its strategic investor, he said.
As per the BSEC’s conditions, the CSE general shareholders’ approval is mandatory for selling shares to its strategic partners, he added. “Any measures will be taken to protect the capital market and investors’ interests,” he said.
Speaking to The Business Post, CSE Chairman Asif Ibrahim said, “The CSE had to go a long way for netting ABG Limited as a strategic partner. This will elevate the bourse to a new height. Because the company is a sister concern of the country’s biggest conglomerate Bashundhara Group.”
Shahriar Molla declined to comment on the issue.
ABG Limited is offering Tk 15 for each share; therefore, the 25 per cent stake will cost around Tk 240 crore.
Earlier, ABG Limited submitted a proposal to the CSE to become its strategic partner. The CSE sent the proposal to the BSEC on August 1. On August 29, ABG Limited made a presentation before the regulator about its plan.
On November 13, 2016, the CSE published an invitation to submit an expression of interest to be its strategic investor in only one newspaper.
After the 2010 stock market crash, stakeholders demanded the government ensure monitoring to stop manipulation and bring transparency to the market to restore investors’ confidence. Following the demand, the demutualization act was passed in parliament in 2013.
Intending to become a more professional and profitable organisation, the CSE went through a demutualisation in 2013, a process that separated its ownership from management.
According to the demutualization act of 2013, 40 per cent of the CSE’s shares were credited to its members’ accounts while the remaining 60 per cent were kept in a blocked account.
Of the 60 per cent, 35 per cent would be offered in an initial public offering by the exchange, while the remaining 25 per cent would be held by the strategic investor.
In September 2018, the much-anticipated strategic partnership agreement between the Dhaka Stock Exchange (DSE) and the Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange came into effect.
The DSE authorities handed over 25 per cent of their shares to the consortium, which paid Tk 947 crore.
