DSE asks United Power to explain non-execution of UMPL share sales deal

Staff Correspondent | Published: 00:00, Oct 23,2019

 
 

The Dhaka Stock Exchange on Tuesday queried United Power Generation and Distribution Company Limited over non-execution of irrevocable sales declaration of one crore shares in the stipulated time by United Mymensingh Power Limited, one of UPGDCL’s corporate directors.

The country’s premier bourse on the day sent a query letter to UPGDCL, a listed company on the stock exchange, about the non-execution of the sales declaration.

The DSE in a web post on Tuesday said that it was observed that the corporate director did not execute the sales order within the stipulated time — 30 working days of the declaration.

‘As the order was irrevocable type, the DSE issued a query letter to the corporate director about non-execution of the sales declaration,’ it said.

Earlier on August 6, UPGDCL disseminated information that UMPL expressed its intention to sell 1,00,00,000 shares out of its total holding of 43,11,70,994 shares in UPGDCL at the prevailing market price (in the block market) through the stock exchange within 30 working days.

But the corporate director later cancelled the share sales, saying that the prevailing prices were not favourable.

UMPL, which holds almost 90 per cent of UPGDCL shares, were supposed to sell two crore shares to GEM Global Yield Fund, a foreign investment entity.

UMPL and UPGDCL are two concerns of United Group.

After the disclosure about the deal, share prices of UPGDCL started surging and reached Tk 410 per share on August 22 from Tk 384.2 per share on August 5.

But, share prices of the company continued plummeting since August 23 as investors had found that the sales of the UPGDCL shares had not been executed and the delay had raised doubts in their mind about the company’s intention regarding the share sales decision to the foreign entity.

DSE officials said that as per securities rules, the company could not backtrack on the share sales decision after making the information public.

On March 31 this year, United Group had signed a share purchase agreement with Gem Global Yield Fund LLC SCS to sell UPGDCL shares held by UMPL, and informed the commission about the deal on April 7.

On April 23, the market regulator declined to give approval to the share purchase deal between UMPL and Gem Global on the grounds that the method used for share valuation and trading period was not consistent with the securities rules.

The Group under the new deal had decided to settle the share sales in the block market of the stock exchanges.

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