Bangladesh Submarine Cables Company has sought 14 months time from the Financial Reporting Council to issue shares against share money deposits of the government to comply with a recent FRC directive.
It has also sought guidelines on setting the issue price of shares to be issued against share money deposits.
The BSCCL sent a letter to the FRC on August 6 regarding the issue.
FRC executive director Sayeed Ahmed told New Age that the FRC received a letter from the company about the extension of timeframe and setting of issue price.
The matter would be placed before the next council meeting and the members would decide the issue, he said.
The FRC on February 11 this year issued a directive that companies must issue shares against share money deposits within six months and the money cannot be retractable and returnable.
Besides, the companies must consider the share money deposit as potential share capital and accordingly they must include the amount in calculation of earnings per share.
Earlier on July 29, the BSSCL sent a letter to the FRC mentioning their inability for issuing shares in favour of the government before settlement of audit objection raised by the Foreign Aided Projects Audit Directorate (FAPAD).
In the letter, the BSCCL said that the company received total Tk 166 crore in equity money in 2015-2017 under the installation and establishment of second submarine cable system for international telecommunication in Bangladesh.
On September 22, the FAPAD found that Tk 8.57 crore of the total amount remained unused, so it asked the company to pay the amount to the government’s account.
The BSCCL sent a letter to the FAPAD for settlement of the issue, which remained under consideration.
The BSCCL mentioned in the letter that the amount of total equity money could be finalised after the resolution of the audit objection.
BSCCL company secretary Abdus Salam Khan told New Age that the company sought permission from the FRC regarding issuing shares after the resolve of the audit objection matter.
The project cost less than the amount received from the government, and the FAPAD wanted to pay back the amount to the government’s account, he said.
Being a listed company, the BSCCL has to prepare audited financial statements and asset valuation, take shareholders approval and government’s approval, and finally take approval from securities regulator to issue shares against government’s share money deposits.
Thus, it would take time to complete all the procedures.
The BSCCL also said that it would put an adverse impact on the stock market if the company included share money deposit in calculation of EPS before the settlement of the audit objection, setting issue price and necessary approvals.
So, the company appealed to consider the matter.
Earlier on June 16, the FRC wrote the finance ministry that six listed state-owned companies were yet to issue shares against Tk 6,652 crore share money deposits of the government, depriving the government of the ownership and dividend income.
The government was deprived of dividends worth Tk 1,115.51 crore in FY19 and Tk 948.92 crore in FY18 as the six companies did not issue shares to the government.
The government did not own shares against its investments in the companies, it said.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Stocks