BSEC gets tough on Doel Group

The Bangladesh Securities and Exchange Commission (BSEC) has decided to delist four companies and two debentures of Doel Group of Industries, which will compel the group to return around Tk 57 crore to its investors.

The companies are Bangladesh Chemical Industries, Bangladesh Dyeing & Finishing Industries, Bangladesh Luggage Industries and Bangladesh Zipper Industries.

All the companies are listed with the over-the-counter market. They are not performing well and have not paid any dividends to investors for at least the last decade.

This prompted the BSEC to permanently remove the companies from the country's stock exchanges.

The debentures that are going to be delisted are BD Zipper 14 per cent Debenture and BD Luggage 14 per cent Debenture.

Now, Doel Group will have to return around Tk 57 crore to the investors for the delisting, said a top official of the stock market regulator.

"Investors will get back at least some of their money," he added.

The stock exchanges will have to maintain an escrow account to return investor's money at face value or a negotiated price, the commission said in a press release on Tuesday.

An escrow account is an account where funds are held in trust whilst two or more parties complete a transaction.

Doel Group of Industries started its venture in 1981 through manufacturing and marketing of artificial leather and rexine materials by setting up the Bangladesh Chemical Industries in Pagla, Narayanganj, according to the company's website.

It later added knit and woven fabrics, zippers, nylon and tafetta fabrics, readymade garments and sweaters, sportswear, jackets, travel bags, soft luggage, polypropylene tapes and Portland cement.

Entrepreneurs raise money for a period by issuing debentures, a type of debt instrument that is not backed by any collateral. There are eight debentures on the DSE board now.

All currently listed debentures are matured and are still listed due to some incomplete legal proceedings, according to the BSEC's website.

As a result, they have not returned the money to investors, prompting the BSEC to come up with a strict move.

Investors welcomed the BSEC's decision.

"The decision will enhance investors' confidence as investors will get their money back which was almost gone," said Abdur Razzaque, a retired government official, who has an investment in the stock market.

"It will give a message to other issuers that there is no way to cheat investors," he added.

On Tuesday, the commission approved an open-ended mutual fund, SAML Income Unit Fund. The targeted fund is Tk 10 crore.

Of the amount, Tk 1 crore will be funded by sponsors and the rest will be open for investors.

The fund manager is Shahjalal Asset Management and the trustee and custodian of the fund would be Sandhani Life Insurance and Brac Bank respectively.