Two economic giants -- India and China -- are in a race to buy 25 percent stake in the Dhaka Stock Exchange.
A consortium of the Shanghai Stock Exchange and the Shenzhen Stock Exchange has proposed to purchase 45 crore shares of the DSE for Tk 22 each.
It said it will also provide the stock exchange with a technical support involving $37 million (about Tk 300 crore).
The consortium demanded one post of director at the DSE board, saying it will not ask for any return on its investment for 10 years.
Another consortium, led by the National Stock Exchange of India, has offered Tk 15 for each share. It has partnerships with American Nasdaq, and Frontier Fund Bangladesh, a private equity fund.
In the proposal, the NSE said it wanted to provide technical support to the DSE, but it did not mention the monetary value.
The NSE also demanded two posts of directors at the board and the option of leaving the board after five years.
As the Chinese consortium's bidding price is nearly 47 percent higher than that of the Indian one, the DSE approved the Chinese proposal at its board meeting on Saturday, said sources at the stock exchange.
But the share market regulator, Bangladesh Securities and Exchange Commission, declined to give the work order a go ahead and asked the DSE to further scrutinise the proposals, the sources said.
In the meantime, the Indian side, anticipating that the Chinese consortium might win the work order, apparently is lobbying the DSE and the BSEC to buy the stake.
Vikram Limaye, managing director and CEO of the NSE, arrived in Dhaka on Sunday to discuss the issue with the authorities concerned, said BSEC sources.
On that day, he had two separate meetings with the managements of the DSE and the BSEC. He proposed that both the authorities accept their investment proposal, claiming that though their offer price was lower than that of the Chinese consortium, they were more experienced in stock exchange development, according to a BSEC official.
Soon after the meeting with Limaye, the BSEC authorities asked the management of the DSE to scrutinise both the proposals again, the official said.
The country's premier bourse took the initiative to include strategic partners in it to get modern technological facilities, and services for management and business development as part of its demutualisation scheme taken up in 2013. The move separated the bourse's management from ownership.
According to the demutualisation scheme, 25 percent of the 180 crore DSE shares would be sold to strategic partners, 35 percent to small investors, and 40 percent would be with the Trading Right Entitlement Certificate or TREC holders.
“We will select the investor who will be more appropriate for development of our stock exchange” said KAM Majedur Rahman, managing director of DSE.
Speaking on condition of anonymity, a member of the bourse said the DSE board had approved the Chinese proposal as per the bidding rules.
Quoting the tender rules, the member said though the BSEC advised scrutinising further the proposals, there was no scope for accepting the proposal that offered a lower price.
It is mandatory for the DSE to sell shares to strategic partners within five years of demutualisation, according to the rules.
In June last year, the DSE invited tender for the first time and received an investment proposal from a local investor.
LankaBangla Finance in partnership with Delta Life Insurance had proposed more than Tk 30 for each DSE share. But the board did not accept the proposal as they were interested to take foreign investors as strategic partners considering their technical knowledge and experience, according to a DSE source.