BSEC continues with its tough stance on gamblers
The Bangladesh Securities and Exchange Commission yesterday came up with a set of new conditions for junk stocks and slapped several companies with big fines as part of its efforts to go tough on the rogue players.
The stock market regulator took the decisions at a meeting chaired by its new chairman Shibli Rubayet Ul Islam. The top officials of BBS Cables and some other companies were fined for their involvement in gambling.
BSEC made it mandatory to reform the board of directors of the companies if they remain in the Z category for two years or more. Junk stocks belong to the Z category.
In case of failure, they will not be allowed to remain on the board of any other listed company or stock market intermediary company, BSEC said in a statement.
Moreover, special audits will be conducted and observers will be appointed in these companies to restore good governance.
If a company still fails to improve the situation within four years, the commission will go for tougher actions and it may delist the company, according to the statement.
During the period, the shares of directors and sponsors of the junk stocks will remain frozen.
There are other changes to the conditions for which companies will be downgraded to the Z category.
If a company fails to declare a dividend for two years in a row, it will be downgraded to the Z category.
If a company fails to hold an annual general meeting or remains in net operating loss or negative cash flow in the preceding two years after starting operation, it would be categorised as a junk stock.
The trade settlement period for junk stocks has been reduced to three days from nine days.
For market manipulation and insider trading, BSEC fined Khadija Tahera, spouse of the chairman of BBS Cables, Tk 3 crore; Abu Noman Howlader, managing director of the company, Tk 10 lakh; Md Forhad Hossain, brother-in-law of the MD, Tk 30 lakh; and Syed Ferdous Raihan Kirmany, a nominated director, Tk 5 lakh.
It also fined all directors of BBS Cables Tk 10 lakh each for making delay in disclosing price-sensitive information.
The regulator also fined Kabir Ahmed and his associates Tk 25 lakh; Prudential Capital, a stockbroker, Tk 55 lakh; Abdul Quaium and his associates Tk 1.80 crore; Md Nazrul Islam and his associates Tk 25 lakh; Syed Anisur Rahman Tk 25 lakh; and Hasan Jamil Tk 35 lakh for serial trading.
The commission meeting allowed Mir Akhter Hossain to find its cut-off price, which is going to raise a capital of Tk 125 crore through book building method.
With the proceeds of the initial public offering, it will purchase construction materials, machinery and repay loans.
The construction company's earnings per share stood at Tk 6.32 for the 2018-19 financial year. IDLC Investments is its issue manager.
BSEC approved the right shares of Pragati Life Insurance to raise a fund of Tk 23 crore. The premium of each share is Tk 5.
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