BSEC asks BD Welding to sell 25% shares held by ICB

The Bangladesh Securities and Exchange Commission (BSEC) has advised Bangladesh Welding Electrodes Limited to sell 25.25 per cent shares held by Investment Corporation of Bangladesh (ICB).

ICB has a representation on the board of directors of the company against the shares which remained blocked as per the rules.

On August 24, the BSEC gave the advice after a meeting with the board of directors of BD Welding at the regulator’s headquarters. BSEC Chairman Shibli Rubayat-Ul-Islam presided over the meeting.

Before selling the stake to any potential buyers, BD Welding needs to take approval of the regulator, according to BSEC officials.

Sponsor directors hold 31.01 per cent, institutional investors 2.88 per cent, foreign 0.72 per cent, and general public 65.39 per cent of the company’s total stake, according to the Dhaka Stock Exchange.

Since 2017, the production of BD Welding remained suspended after it failed to open a letter of credit due to being a defaulter with Southeast Bank.

The listed company sold its factory located in Chattogram to pay off Southeast Bank’s loan amounting to more than Tk 30 crore.

At the meeting, the BSEC also advised the company to take necessary steps to reinstate the company secretary since his removal process was not in line with the securities laws.

The regulator said that executive directors should not be engaged in any operational issues of the company since the tenure of the executive directors appointed by the company time to time expired.

The statutory audit of the company and pending annual general meetings (AGMs) should be completed subject to approval from the High Court, the meeting was told.

The board meeting should be conducted according to the norms of secretarial practice and securities laws. No one other than board members, the company secretary, and the chief financial officer of the company should be allowed to attend any board meeting, according to the meeting.

Listed in 1999, BD Wielding share rose more than 7 per cent to Tk 27.90 on Wednesday.

In January 2021, the BSEC restructured the board of BD Welding Electrodes by appointing two independent directors to the board of the non-performing company.

According to the BSEC, the commission will also appoint a special auditor to the company to conduct an audit on the company’s whole affairs, including those in the last two financial years at the company’s cost.

The company will not be allowed to sell, pledge, transfer, or dispose of any assets, including FDR, without prior approval of the commission.

In 2009, five out of eight sponsors sold their entire holdings to the ICB, and now the state-owned investment entity is represented on the BD Welding board.

The manufacturing entity, which was established in 1969, was the first welding electrode manufacturing facility in East Pakistan with a total plant and machinery from Switzerland.

The company was taken over by the government of Bangladesh in 1973 as abandoned property. The government divested it in 1984, and the factory was purchased by a former bureaucrat who was the highest bidder.

BD Welding manufactures and markets welding electrodes, industrial gases, and dissolved acetylene. The factory facilities consisted of two products, namely: welding electrodes and industrial gas.