The Bangladesh Securities and Exchange Commission on Wednesday fined the directors of C&A Textile Limited Tk 19 crore in total and banned them from becoming directors of any other listed company for violating a number of securities rules.
The regulator also decided to punish directors of BBS Cables Limited as the company did not disclose information about related party transaction in its initial public offering prospectus.
The BSEC at a commission meeting presided over by its chairman Shibli Rubayat-Ul-Islam made the decision about taking the disciplinary actions, a BSEC press release said.
The regulator found that C&A Textile’s directors Rukshana Morshed, Sharmin Akther Lovely and Bangladesh Shoes Industries Limited together sold around 1.22 crore shares of the company without prior declarations and earned around Tk 12 crore from the sales.
After the sales, the operation of the company was shut down and it remains shut still now.
So, the commission fined Rukshana Tk 8 crore, Sharmin Tk 4 crore and Bangladesh Shoes Tk 2 crore.
Besides, the textile company did not submit the monthly shareholding reports of directors between August, 2017 and August, 2018 and also did not respond to the queries made by the BSEC and the Dhaka Stock Exchange, breaching securities rules.
So, the commission fined C&A Textile’s five directors Tk 1 crore each for the rule violation.
Tung Hai Knitting and Dyeing also violated the rule as it did not submit the monthly shareholding position of its directors for the same period.
The regulator imposed penalty on Tung Hai Knitting and Dyeing’s five directors Tk 1 crore each and banned them from becoming director of any other listed company.
The commission at the meeting also imposed penalty on BBS Cables Limited as it found anomalies in its IPO prospectus.
The regulator found that BBS Cables brought machinery worth Tk 57.67 crore from Gomoti Traders, a company owned by BBS Cables’ director Ashraf Ali Khan.
The transaction was 79 per cent of the company’s total machinery purchase and the company required to disclose the information as related party transaction separately in the IPO prospectus. But, the company hid the information.
Auditor Ahmed Zaker & Co and issue managers Banco Finance & Investment Limited and ICB Capital Management Limited also hid the information and issued due diligence certificate, breaching securities rules.
For the wrongdoings, the commission fined the directors of BBS Cables Tk 5 lakh each, and two issue managers and auditor Tk 5 lakh each.
The regulator at the meeting also fined DSE brokerage house Salta Capital Limited Tk 50 lakh for the violation of securities rules.
The BSEC at the meeting also allowed Standard Bank to float non-convertible perpetual bond worth Tk 500 crore.
The bank will float the unsecured nonconvertible, coupon bearing perpetual bond.
The face value of each unit of the bonds of the bank will be Tk 1 crore and coupon rate will be 11-14 per cent. Only banks, financial institutions, corporate institutions and other eligible investors will be allowed to subscribe the bonds through private placement.
The purpose of the issue is to strengthen the bank’s additional Tier-I capital base.
IDLC Investment Limited is the trustee while IDLC Finance Limited is the lead arranger of the bond.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Stocks