SEC Quarterly Review 


SEC relaxes regulation 42 of the Listing Regulations: The Securities and Exchange Commission has relaxed the regulation 42 of Exchange Listing Regulations up to July  31, 2002 for the greater interest of general investors. In the said regulation it is mentioned that all shares of publicly listed companies listed in the exchanges shall be sold through the exchanges. But when a transaction is intended to take place under exceptional circumstances privately, seller shall apply to the SEC through the stock exchanges.

Investigation against German Bangla JV Food Ltd.: The Securities and Exchange Commission constituted an enquiry committee to investigate into some irregularities against German Bangla J.V Food Ltd in using Initial Public offering (IPO) funds. It will also investigate into the failure of the company in fulfilling some other commitments made in the prospectus.

Greenfield Companies: Greenfield companies, which raise funds from the capital market through Initial Public Offering (IPO) will now be placed in a new category  called ‘G’-Category. The new group will end a long controversy over placement of greenfield companies in the existing A, B or Z category. The criteria for ‘G’ –category are similar to the existing ‘B’-category with the difference in its trade settlement procedure. The ‘G’ –category  will not enjoy netting settlement system. 

Investment in sick listed companies: The Securities and Exchange Commission has framed a rule paving the way for merger and acquisition of a substantial number of shares of sick listed companies by others. The new rules wmwKDwiwUR I G·‡PÄ Kwgkb ( D‡j­L‡hvM¨ msL¨K †kqvi AR©b, AwaMÖnY I KZ©„Z¡ MÖnY) wewagvjv, 2002 are aimed at  facilitating return for investors of such companies.

SEC penalizes sponsors of two companies for irregularities: The Securities and Exchange Commission has penalized sponsors of two companies on a complaint of irregularities against the companies. In the SEC order, four of the sponsors of JH Chemical Industries Ltd. including the Chairman and Managing Director of the company were penalized as the company failed to submit its audited accounts to the SEC for the last three years. The company also failed to hold the Annual General Meetings (AGM) for the years 1999, 2000, 2001 in due time and to submit its half-yearly accounts. Company’s Chairman Ragib Ahsan was penalized with Tk. 8 lacs, its Managing Director Syed Afsar Hossain was penalized with Tk. 4 lacs and two of its other directors Nurul Alam and Debobrata Dutta were penalized with Tk. 2 lacs each.

DSE CEO removed: The Chief Executive Officer (CEO) of Dhaka Stock Exchange (DSE), Rezaur Rahman was removed by the SEC on charges of negligence in duties and trying to mislead the capital market regulators by providing faulty surveillance software. The DSE Council on an emergency meeting endorsed this decision of the Commission.

Beximco shares grounded: The Securities and Exchange Commission suspended trading of 11 Beximco companies scrips listed on the bourses for not announcing the dates of AGMs and book-closures on the basis of boards decision as per SEC notification. The companies facing suspension are Beximco Ltd., Beximco Synthetics, Bangladesh Online, Beximco Denims, Beximco Fisheries, Beximco Infusion, Beximco Knitting, Beximco Pharmaceuticals, Beximco Textiles, Padma Textiles and Shinepukur Holdings. On 8th May, 2002 trading of the 11companies of  Beximco group resumed both at the Dhaka Stock Exchange and Chittagong Stock Exchange as they have announced the dates of AGMs, book-closures with times and venues.

SEC gets court order to attach property of Sonali Paper: The Securities and Exchange Commission has received order from the Office of the General Certificate Court, Dhaka to attach the immovable property of Sonali Paper and Board Mills Ltd. for non-payment of the penalty imposed by SEC on the company.

Restriction on raising funds: The Securities and Exchange Commission has decided to bar bank loan defaulters from raising funds from the stock market and put a one year lock-in on share bought by financial institutions through private placement. A company is to be barred from raising funds, if any, of their sponsors, or directors or sister organizations appear on the list of Credit Information Bureau (CIB) Report of the Bangladesh Bank.

Netting facilities: The Securities and Exchange Commission has decided that if the listed companies proposed dividends are less than 60% of the previous year, trading of their scripts will be outside the netting settlement facility in the bourses from the period of the proposal till the holding of the Annual General Meetings.

SEC directives on two companies: The Securities and Exchange Commission has issued directives under section 20A of the Securities and Exchange Ordinance, 1969 to Bangladesh Luggage Industries Limited and Bangladesh Zipper Industries Ltd; to pay all the outstanding principals and interests of debentures issued by the companies immediately and to submit  compliance reports there on to the Commission within seven days from the date of respective directives  issued to the companies.

Credit Rating Information Services Ltd.: The Securities and Exchange Commission has granted registration certificate to the Credit Rating Information Services Ltd. (CRISL) under the Credit Rating Companies Rules, 1996.


Enquiry Committee: The Securities and Exchange Commission constituted an enquiry committee to investigate into complaint against irregularities of Chittagong Cement Clinker Grinding  Company Ltd. The committee led by Mr. Mansur Alam, Executive Director , SEC. Other members of the committee are Mr. Abdul Hannan Zoarder, Executive Director, Mr. Shuvra Kanti Chowdhury, Director (Current Charge) and A.K.M. Ziaul Hasan Khan, Deputy Director, SEC.

Miscellaneous: The Securities and Exchange Commission has issued a dispose off letter to Imtiyaz Hussain & Company and warning letter to Azam Securities Ltd., Securities Consultant Ltd. and  Capital  Market  Services Ltd. of the stock exchanges. Earlier, they were served show cause notices for alleged  violation of  securities law.


DSE  hails national budget: Dhaka Stock Exchange (DSE) has hailed the national budget for the fiscal year 2002-2003. DSE said that the investors would be benefited if the incentives given in the budget are properly utilized by the listed companies.


Investor’s Information Cell: To facilitate active investors, specially new investors, Chittagong Stock Exchange (CSE) has set up an information cell named Investor’s Information Cell (IIC). An investor who is new in stock investment can have information about buying and selling process, name and addresses of CSE member firms, process for transferring  shares, addresses and obtaining annual reports and financial data of the listed companies from IIC.

Seminar on Custodian Bank and its Practices: An exclusive seminar on “Custodian Bank and its Practices” held on June 30, 2002 for the CSE members, authorized representatives and  CSE executives. The initiative has been taken by the CSE  for the participants to share the experience and information of custodian bank and its practices in Bangladesh.