The capital market watchdog issued the show-cause notice in connection with non-submission of account clarification regarding the revaluation of the bank's land.

The SEC in a recent show-cause notice issued to the bank and its high-ups said the issuer company (Southeast Bank) revalued its land on December 21, 2005 and increased the value of land by Tk23.16 crore and such revaluation was done without the consent of the SEC and violated the Securities and Exchange Ordinance, 1969.

But, the issuer was restricted to account for any upward revaluation of its fixed assets without the clearance of the commission, the notice said.

According to the show-cause notice, the issuer sought SEC's permission on December 26, 2005 for revaluation of its fixed assets through creating reserve while the bank revalued its assets on December 21, 2005, which is not acceptable.

On August 15 this year, the SEC issued a letter to the third generation bank asking it to clarify its position about revaluation of its fixed asset without the consent of the commission. But the grounds stated in the reply letter were not considered acceptable, according to the notice.

The hearing will be held at the SEC office in Dhaka on January 28, 2007.

An SEC high official said revaluation of fixed assets is a sensitive matter for the capital market as any information regarding the revaluation can influence the price of a security.

Hence, the revaluation of fixed assets by the bank indicates that there might be an ill motive behind the process, he said.

If the bank and its high-ups cannot provide acceptable reply during the hearing, necessary actions will be taken against the bank, the official added.

When contacted, Company Secretary Muhammad Shahjahan said the bank is yet to receive the show-cause notice.