SEC Quarterly Review 

Oct - Dec 2001 


                                                                    The Commission

SEC Annual Report placed at the JS: The State Minister for Finance and Planning Anwarul  Kabir Talukdar placed  the Annual Report 2000-2001 of the Securities and Exchange Commission,  Bangladesh in the Jatiya Sangsad. The report contains the activities of the Commission, key   statistics of the capital market and performance of the stock exchanges. The report also depicts regulatory steps taken by the Commission to vitalize the share market and at the same time protect the interest of investors.
Country’s first credit rating agency: In order to facilitate the ratings of the companies and securities in the capital market, Securities and Exchange Commission (SEC) has accorded conditional registration to the Credit Rating Information and Services Ltd.(CRISL). Companies will be rated according to their overall activities. As a result investors will be able to make choice regarding the quality of their investments.
Direct listing opportunity: The Securities and Exchange Commission (SEC) has approved a draft regulations providing direct listing opportunities to the public limited companies. The regulations have already been published in the official gazette. The direct listing opportunity will be available for three months from the date of publication of the notification, i.e. up to 8 January 2002.
Round table Discussion: A roundtable discussion on “Capital Market: Problems and Remedies” organized by the Dhaka Chamber of Commerce and Industry (DCCI) was held on 6 November, 2001.The Commerce  Minister Amir Khosru Mahmud  Chawdhury was the chief guest at the discussion. State Minister for Finance Shah Mohammad Abul  Hossain also attended the roundtable as special guest. Securities and Exchange Commission Chairman Manir Uddin Ahmad, Dhaka Stock Exchange Chairman Shahique Khan, DCCI President Benazir Ahmed, DCCI Senior  Vice President Mahbub–uz Zaman, DCCI  Director Joinul Abedin, and Convenor of DCCI  Capital  Market Development and Privatization wing AZM Nazimuddin,  among others, spoke at the  meeting. Chairman of the Department of Finance and Banking of Dhaka University Prof. M A Baqui Khalily presented the key note paper at the round table discussion.

   Jamuna Multipurpose Bridge Authority’s share (proposed):  In a bid to increase depth of the capital

   market, the Securities and Exchange Commission (SEC) has suggested converting Jamuna Multipurpose

   Bridge Authority into a public limited company and partially divesting its shares through the capital market.

   The SEC also advocated for offloading shares of profitable state-owned gas, oil and power companies

   through the stock market

Dividend declaration by companies: To check irregularities in announcing dividend for shareholders, the Securities and Exchange Commission (SEC) in a Gazette notification asked the  board of directors of the issuer company of a listed security, while considering/adopting any audited financial statements, to fix the date of relevant annual general meeting and take decisions with regard to recommending  dividend as well as the entitlement of the shareholders to get the dividend.

Removal of sponsors from management: The Securities and Exchange Commission (SEC) has formulated new rules in draft   form barring the issuers from remaining part of the management of the listed companies, mostly traded under Z- category in the bourses, aiming to force the companies to improve their operational and financial performance. According to the proposed rule, there will be a reconstituted board of directors consisting non-sponsors from the qualified shareholders to run a company efficiently. They will be appointed in an extra-ordinary general meeting (EGM). The new draft notification has been sent to the leading chambers, two bourses and the association of listed companies, for their opinion

Change in Index calculation : The Securities and Exchange Commission (SEC) has directed both the exchanges to change their index calculation criteria by excluding the ‘Z’ category shares from all share price index from 24 November, 2001. The new index is calculated for securities falling under ‘A’ and ‘B’ categories only and on weighted average method considering the value of the traded volume. The step has been taken in order to reduce market manipulation and help investors make informed decisions
Removal of monopoly of audit firms: The monopoly of audit firms for auditing same public limited companies year after year has now been broken with the issuance of a new rule by the Securities and Exchange Commission (SEC). According to the new rule, no company will be able to appoint the same firm of chartered accountants as its statutory auditor for a consecutive period of more than three years
Appointment of auditor for special audit: The Securities and Exchange Commission (SEC) has appointed Ali & Associates as auditor under rule 12(3) of the Securities and Exchange Rules, 1987 for conducting  special audit of the annual accounts of Sreepur  Textile Mills Ltd. for the year ended 31st December, 2000. The order for special audit has been made in the public interest

Dynamic Textile penalized: The Securities and Exchange Commission (SEC) has penalized Dynamic Textile Industries Ltd. with a fine of TK. 1 lac for non-compliance of securities law in connection with dividend payment

Chairman and MD of Mark BD penalized: The Securities and Exchange Commission (SEC) has penalized the Chairman and Managing Director of Mark Bangladesh Shilpa and Engineering Limited with a fine of Tk.10 crore for non-cooperation with the auditors appointed by the Commission for special audit of the financial statements for the year ended 30th June, 2000
Former MD of SABINCO sued: A case has been filed by the Securities and Exchange Commission against Md. Kutubuddin, former managing director of Saudi-Bangladesh Industrial and Agricultural Investment Company Ltd.(SABINCO) on charges of market distortion by manipulative  trading of shares  of  different  companies in the stock exchanges  during June to July, 2000 through different brokers
SEC lodged case: The Securities and Exchange Commission (SEC) lodged criminal case with the Chief Metropolitan Magistrate Court in Dhaka against seven shareholders of Chittagong Cement Clinker & Grinding Co. Ltd. including T K Oil Refinery Ltd. of Chittagong on charge of violation of SEC regulations related to insider trading
Brokerage house suspended: The Securities and Exchange Commission (SEC) has suspended DSE brokerage house – Anwar Securities Ltd. for 15 days with effect from 4 October 2001 for making large purchases against accounts having insufficient deposit
Show cause notices: The Securities and Exchange Commission (SEC) has issued show cause notices on four brokerage houses for violating securities law in connection with manipulative trading involving SABINCO which took place during June and July 2000. The houses are Azam Securities Ltd., Securities Consultants Ltd. (SCL), Imtiyaz Hussain & Company and Capital Market Services Ltd


DSE prepares for Over-The-Counter trading: The Dhaka Stock Exchange has taken steps for introducing over-the-counter (OTC) trading on the stock exchange. In this market non-listed securities with capital of at least one crore  taka as well as securities of de-listed companies can be traded
DSE hails Government decision: The Dhaka Stock Exchange has welcomed Government decision to cut bank rate by one percent, interest rate against export credit to the ready made garments sector by three percent and interest rate on saving certificates


New President of CSE: The board of directors of Chittagong Stock Exchange (CSE) in its meeting elected Mr. Mirza Salman Ispahani as its new President. The post of the CSE president fell vacant following the resignation of its founder president Mr. Amir Khosru Mahmood Chowdhury who is now the minister for commerce. Before assumption of the post of CSE psresident, Mr. Ispahani was the Senior Vice President of the bourse
6th AGM of  CSE: Sixth Annual General Meeting of the Chittagong Stock Exchange Ltd. was held on 24 December, 2001. The CSE President Mr. Mirza Salman Ispahani presided over the meeting. The meeting approved the audited accounts of 2000 of CSE and re-appointed Rahman Rahman Huq as auditor for the next year