Home ›› 25 Oct 2022 ›› Front
The Bangladesh Securities and Exchange Commission (BSEC) has instructed Bashundhara Group’s ABG Limited, which was recently showed interested to be an eligible partner of the country’s second bourse, to get rid of one-person company.
“ABG Limited is now required to include Bashundhara’s several subsidiaries as shareholders in the company. Because one person company poses a risk to a strategic investor for any stock exchange,” said a top BSEC official.
In this regard, BSEC sent a letter to ABG Limited on October 13.
The move comes around three weeks after The Business Post published a report headlined “CSE’s strategic investor is a one-person-led newly-formed firm” on October 4.
Bashundhara Group Managing Director Sayem Sobhan Anvir is the chairman and managing director of ABG Limited.
Speaking to The Business Post, ABG Limited Company Secretary Shahriar Molla said on Monday, “We’ve received a letter from BSEC in this regard, but the regulatory body cannot do so as per the securities rules.
We will reply to the regulator’s instructions shortly.”
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 Anvir, according to The Business Post’s investigation. The company secretary held only one share of ABG.
On October 13, the stock market regulator imposed some conditions on ABG Limited to be a strategic investor of the Chittagong Stock Exchange (CSE).
On September 28, the stock market regulator conditionally approved the CSE’s proposal to sell its 25 per cent stake to ABG Limited in line with the demutualisation process.
Yet, ABG did not violate the Companies Act or the Demutualization Act, but market insiders remained skeptical about the company’s capacity.
On February 27, the company was registered with the Registrar of Joint Stock Companies and Firms (RJSC).
As per the BSEC’s conditions, the CSE general shareholders’ approval is mandatory for selling shares to its strategic partners. “Any measures will be taken to protect the capital market and investors’ interests,” the BSEC official said.
ABG Limited is offering Tk 15 for each share; therefore, the 25 per cent stake will cost around Tk 240 crore.
Earlier, ABG 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, it made a presentation before the regulator about its plan.
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.
The CSE was demutualized in 2013 to separate its ownership from management.
According to the Demutualization Act 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.
