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ABG Limited becomes CSE’s strategic partner

Niaz Mahmud
21 Nov 2022 00:00:00 | Update: 20 Nov 2022 22:25:35
ABG Limited becomes CSE’s strategic partner
Bashundhara Group Chairman Ahmed Akbar Sobhan addresses the agreement signing ceremony as a special guest – Courtesy Photo

Bashundhara Group’s ABG Limited has formally become the strategic partner of the port city bourse Chittagong Stock Exchange (CSE).

To this end, an agreement was signed between the two parties during a ceremony held at the Radisson Blu Chattogram Bay View hotel on Sunday evening.

ABG Limited’s Managing Director Sayem Sobhan Anvir and CSE’s Acting Managing Director Md Ghulam Faruque signed the contract on behalf of their respective organisations.

The Bashundhara Group’s concern becomes the CSE’s strategic partner by acquiring a 25 per cent stake in the bourse.

From now on, ABG Limited would be acting for the technical and other developments of the bourse, putting a significant impact on the progress of the country’s capital market.

Land Minister Saifuzzaman Chowdhury addressed the event as the chief guest, while Private Industry and Investment Adviser to Prime Minister Salman F Rahman attended there as the guest of honour.

Deputy Education Minister Mohibul Hasan Chowdhury, Bangladesh Securities and Exchange Commission Chairman Shibli Rubayat Ul Islam, and Bashundhara Group Chairman Ahmed Akbar Sobhan graced the programme as special guests with CSE Chairman Asif Ibrahim in the chair.

Earlier in October, the Bangladesh Securities and Exchange Commission (BSEC) had instructed ABG Limited to get rid of one-person company.

“ABG Limited needs 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,” a top BSEC official had told The Business Post.

The move came around three weeks after The Business Post carried a news report titled ‘CSE’s strategic investor is a one-person-led newly-formed firm’ on October 4.

ABG’s paid-up capital was Tk 5 crore, and the number of total shares was 50 lakh. Of the total shares, 49, 99,999 shares were held by Anvir, according to The Business Post’s recent investigation.

On October 13, the stock market regulator imposed some conditions on ABG Limited to be a strategic investor of the Chittagong Stock Exchange (CSE).

Before that, the securities regulator on September 28 this year conditionally approved the CSE’s proposal to sell its 25 per cent stake to ABG Limited in line with the demutualisation process.

Though ABG did not violate the Companies Act or the Demutualization Act, but market insiders remained skeptical about the company’s capacity.

The company was registered with the Registrar of Joint Stock Companies and Firms (RJSC) on February 27.

ABG Limited is offering Tk 15 for each share; therefore, the 25 per cent stake would cost around Tk 240 crore.

Earlier, ABG submitted a proposal to the CSE to become its strategic partner. The CSE referred the proposal to the BSEC on August 1. On August 29, the strategic partner aspirant made a presentation before the regulator about its plan.

ABG Limited is working in a joint venture with an US-based organisation for the necessary technical supports in managing the stock exchange.

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 demutualised 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.

Incorporated in 1995, the Chittagong Stock Exchange currently has a paid up capital of Tk 634.52 crore while its total number of shares is 63.45 crore.

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.