DSE asks Beximco Synthetics to explain 'debenture default'

Dhaka Stock Exchange (DSE) has asked Beximco Synthetics Ltd to immediately explain its position on a claim by two institutional investors that the company was yet to pay them about Tk 10 crore in liabilities against its debentures.

A board meeting of DSE yesterday discussed complaints from the investors against the Beximco Group concern following its declaration that its debenture was fully redeemed which means it has cleared all liabilities against debentures.

The DSE also issued a letter to the company seeking its explanation and informed the Securities and Exchange Commission (SEC) about the matter.

However, officials of Beximco Synthetics could not be contacted for their comment on the allegation.

Beximco Synthetics in a letter to DSE last month said the company had paid all the liabilities against debenture. The company's declaration on payment against debenture was published on the DSE website on October 9.

Contradicting the statement, Investment Corporation of Bangladesh (ICB), trustee of the debenture, and Bangladesh Shilpa Rin Sangstha (BSRS), a major investor in the debenture, came up with the allegations of non-payment.

The ICB said it is yet to receive Tk 5 crore dues from Beximco Synthetics while BSRS said its dues of Tk 4.5 crore are yet to be cleared by the company.

When contacted, DSE Chief Executive Officer Salahuddin Ahmed Khan said the DSE will hear the company and take further action. "Everybody has the right to explain on a contradictory matter and we have given the company a chance to defend itself."

He said if it is found that the Beximco Group company has given misstatement regarding debenture payment, DSE will refer the case to the SEC for legal action.

SEC Chairman Mirza Azizul Islam said SEC will conduct its own investigation into the matter. He said he received a copy of the DSE letter asking for explanation of the 'defaulting' company.

"If the claim of the two institutional investors is found right, it's a serious offence by the debenture issuing company," he told The Daily Star.

Islam said SEC would take stringent action against any company for default in debenture or dividend payment in order to bring back investors' confidence on capital market.

Beximco Synthetics floated 150,000 debentures with a face value of Tk 173 per debenture in 1993 at 14 per cent interest rate. The debenture matured on September 9 this year. The last exchange rate of a two-scrip lot of the debenture was Tk 1,700.