The Bangladesh Securities and Exchange Commission has initiated a move to scrutinise BRAC Bank’s recently published price sensitive information on its subsidiary bKash’s announcement about selling its (bkash) shares to a strategic investor.
As part of the move, the capital market regulator has already instructed the Dhaka and Chittagong stock exchanges to look into the issue, a senior official of the BSEC told New Age on October 19.
BRAC Bank did not follow due procedure, mentioned in a BSEC directive, in publishing the price sensitive information regarding bkash, he said.
On October 10, BRAC Bank published the price sensitive information stating that bKash, a subsidiary of BRAC Bank, entered into a non-binding ‘Summary of Terms’ under which a strategic investor might acquire a minority shareholding in bKash.
It also stated that the proposed acquisition, however, remained subject to satisfactory due diligence, negotiation, completion of a definitive share acquisition agreement and compliance with all applicable regulatory requirements.
Following the BSEC’s instruction, the Chittagong Stock Exchange issued a show-cause notice to BRAC Bank on October 15.
As per the CSE letter, in disseminating price sensitive information an issuer company has to mention the date and time of taking decision in its board, or in other context, the date of coming into its cognizance.
The CSE also said that it observed that BRAC Bank did not comply with the BSEC directive in disseminating the price sensitive information about bKash.
The port city bourse also asked the bank to explain the reasons for such non-compliance.
BRAC Bank, however, is yet to give any reply to the CSE notice.
On October 10, the prices of BRAC Bank shares, which had been trading below Tk 90 for last couple of months, increased by 9.75 per cent, the highest ceiling of price hike on a day.
The share prices of BRAC Bank closed at Tk 95.6 on the day after opening at Tk 87.10, which gradually increased to Tk 104.10 on October 15 riding on investors’ expectation that the prices of the scrip would increase further.
The prices of the scrip, however, closed at Tk 97.9 on Thursday (October 19).
Contacted, BRAC Bank did not give any reply to a New Age query about the price sensitive information issue.
bKash started as a joint venture between BRAC Bank and US-based Money in Motion LLC.
In April, 2013, International Finance Corporation, a member of the World Bank Group, became an equity partner of bKash, while Bill & Melinda Gates Foundation became an investor of the company in April, 2014.