Kazi Zahidul Hasan :
China and India are now at a tug of war to become the strategic partner of the Dhaka Stock Exchange (DSE).
As part of the bid both the countries have reportedly mounted diplomatic pressure on Bangladesh over the issue causing immense discomfort to government policymakers.
On February 10, the DSE Board of Directors, in principal, approved the proposal of the Chinese consortium comprising Shenzhen Stock Exchange and Shanghai Stock Exchange for becoming the DSE’s strategic partner as the highest bidder.
The Indian consortium comprising the National Stock Exchange of India (NSE), Nasdaq and Frontier Bangladesh, slipped from the race after becoming the second highest bidder at a big margin.
Later, the DSE board came under pressure from the Indian lobby to consider the Indian proposal after it forwarded the Chinese consortium’s proposal to the Bangladesh Security and Exchange Commission (BSEC) for its final approval.
“We have decided to give out DSE’s 25 per cent stake to Chinese consortium as the highest bidder. But an Indian lobby within the BSEC continues to put pressure on DSE to consider the Indian consortium’s proposal raising various legal issues,” a DSE high official told The New Nation yesterday.
The Chinese consortium quoted Tk 22 per share and Indian consortium Tk 15.
“The DSE Board remains firm on its previous decision despite the pressure. We came to know that India is exerting diplomatic pressures on the government to consider the Indian consortium’s proposal,” said the DSE official, asking not to be named.
He also said uncertainty over the selection of DSE’s strategic partner badly affected investors’ confidence pushing the DSE in a bearish mood for a month.
As the fight intensified, the Chinese embassy in Dhaka recently in a letter asked BSEC to follow the appropriate laws and policies in the selection of DSE’s strategic partners.
It also forwarded a copy of the letter to the Finance Minister AMA Muhith signed by the Chinese Embassy’s Economic and Commercial Councilor Li Guangan.
“The Minister was unhappy with the content of the letter, as it did not abide by the diplomatic norms,” a Finance Ministry official told The New Nation yesterday on condition of anonymity.
He said the letter created much irritation to the Minister and he wrote a note on the letter expressing his skepticism over the Chinese consortium’s ability to become the DSE’s strategic partner.
“We did not take it in a positive manner, as the Chinese embassy went out of gesture writing the to a Bangladeshi regulator. It has also been seen as undue diplomatic pressure on the government,” said the Finance Ministry official.
He also admitted that an Indian business Group continues to pursue the BSEC though diplomatic channel to win the race of DSE’s strategic partner.
Transparency International Bangladesh (TIB) earlier raised concerns following media reports about influence being exerted by the second-highest bidder and the subsequent move by the regulatory body to select the Indian bidder as the strategic partner of the country’s premier bourse.
In a statement, TIB observed that the selection of the second-highest bidder instead of the highest one without showing any valid reason would trigger questions both at home and abroad.
“The work of a regulatory body is to implement the laws and policies in its relevant field. “We hope that the BSEC will take the decision from the place of maximum professionalism in accordance with its laws and policies so that DSE can get full benefit from the strategic partner,” added the Finance Ministry official.
Commenting on the issue, former Bangladesh Bank Deputy Governor and a stock market analyst Khandaker Ibrahim Khaled told The New Nation that any kind of lobbying or diplomatic pressure is unwanted over the strategic partnership of Bangladesh’s capital market.
“Both China and India are lobbying from the state level, which is unfortunate. In this case, BSEC should make the final decision in line with its own law and terms and conditions, so that the interest of the capital market remains intact,” he added.
He said that as per the condition of DSE demutualization, 25 percent of its shares would be released to any strategic partner as per rules.
