A curious case of SEC preference over DSE selection

Published: 00:05, Feb 15,2018 | Updated: 00:51, Feb 15,2018

 
 

THE pressure that the Bangladesh Securities and Exchange Commission is reported to be putting on the Dhaka Stock Exchange to select a consortium of India’s National Stock Exchange, Nasdaq Stock Market of the United States and Frontier Bangladesh, which became the second highest bidder, as the buyer of 25 per cent of DSE shares, bypassing another consortium of the Shanghani Stock Exchange and the Shenzen Stock Exchange, which was the highest bidder, is detrimental to national interest and, therefore, gravely worrying. What remains more worrisome in this is that almost all member-shareholders and directors of the Dhaka Stock Exchange are reported to be unwilling to agree to and annoyed, and rightly so, at the Securities and Exchange Commission pressure because as the buyer of 25 per cent, or 450.9 million, of the DSE shares worth Tk 9.92 billion, the Shanghai Stock Exchange consortium offered Tk 22 a share while India’s National Stock Exchange consortium offered Tk 15 a share. The Securities and Exchange Commission has asked the Dhaka Stock Exchange chairman and managing director not to send a proposal seeking SEC approval for the selection of the Shanghai consortium, which the Dhaka Stock Exchange board has already approved.
What the Securities and Exchange Commission tries at is understandable as SEC officials are reported to have said that there was pressure from the government to select the India consortium. This appears more so as the chief executive officer of India’s National Stock Exchange is reported to have visited Bangladesh and lobbied the government, the Dhaka Stock Exchange and the Securities Exchange Commission so that the final decision goes in favour of the India consortium. With the subservient and capitualistic attitude that Dhaka has for quite some time been showing towards Delhi, in dealings with all other issues such as border death, the share of transboundary river water and the transit of Indian goods, there are reasons to believe that such efforts of the Securities and Exchange Commission are mindless part of the process, disregarding national interest. While the Securities and Exchange Commission seems to be pressuring the Dhaka Stock Exchange, orally, to change its approved decision, it appears to be unwilling to issue any directive for the stock exchange board in this regard in writing. The stock exchange board has now decided to reconfirm its selection of the Shanghai consortium at a meeting on February 18 as it rightly wants to look after the interest of stakeholders. Given the free technical support, worth $37 million, that the Shanghai consortium is offering along, there is no reason for the Dhaka Stock Exchange not to select the highest bidder.
What is of utmost import is the benefits, money and national interest. As the Shanghai consortium offer entails them more than what the India consortium does, it is wise to go for whoever gives the maximum benefits. The government must, therefore, earnestly look into the issue and allow the Dhaka Stock Exchange to decide whatever it thinks best, the consortium offering the highest bid in the case at hand, in greater national interest.

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