SEC serves notice on BD Luggage
Bangladesh Luggage Industries Limited, a subsidiary of Doel Group, fell behind schedule to pay back around Tk 11 crore worth of debentures to its holders despite raising funds from the capital market 10 years ago.
The Securities and Exchange Commission (SEC) yesterday served a notice on Bangladesh Luggage Industries, its trustee Pragati Insurance Limited and co-trustee National Credit and Commerce (NCC) Bank.
The move is the latest in a series of measures taken by the capital market regulator to pile pressure on the company to pay the dues to investors. The company directors had also been fined.
“The failure to pay back the money is detrimental to the investors. It's also affecting the development of the capital market,” said Farhad Ahmed, executive director of the SEC.
In line with securities rules, if the issuer fails to pay dues by the deadline, the trustee will have to pay the amount to the investors.
The outstanding dues against debentures as on September 30, 2008 neared Tk 11 crore: Tk 8.1 crore in outstanding principal amount and the rest in piled-up interests.
In 1996, Bangladesh Luggage Industries raised Tk 10 crore floating 10 lakh ordinary shares and issued 60,000 debentures worth Tk 15 crore, with each debenture priced at Tk 2,500.
The debt capital raised issuing debentures was convertible up to 20 percent on September 5 and rest 80 percent was fully redeemable in 10 semi-annual installments starting March 5, 1999 and terminating on September 5, 2003. The interest rate of the debentures was 14 percent interest.