Staff Reporter:
Stock Market Investors National Alliance Foundation (AMINAF) placed 7-point demand including enlistment of standard quality of infrastructural companies including Best Holding Limited (Hotel Le Meridien Dhaka) was demanded in the capital market to ensure sustainability of the market.
The AMINAF made the demand in a memorandum sent to Shibli Rubayat-Ul-Islam, the Chairman of the Bangladesh Securities and Exchange Commission (BASEC) on Monday.
In a memorandum comprising with 7-point demands under signed by AMINAF’s President Ruhul Amin Akand and Secretary Sayed Hossain Khandaker, they said that the country’s resource-based infrastructural companies need to be brought to the stock market with a view to bringing stability in the share markets.
The other demands are immediate implementation of the share buy-back law, punitive action against the companies which have paid no dividend despite their financial capacity, formation of Investor’s Welfare Protection Fund, initiative to bring the companies which are still in operation and are in regular touch with BSEC and relaxation transaction rule for the investors who have lost margin loans in transit.
They made the demand at a time when the Best Holdings Limited, operations partner of hotel Le Meridien Dhaka, barred to direct enlisting in the market by the BSEC controversially.
A letter on December 17 addressed to the Chief Executive Officer of the Dhaka Stock Exchange and its Directors attempted to halt the approval of the infrastructure company, Best Holding Limited’s direct listing while questioning the authority of the DSE to exercise its power in such an instance.
Direct listing is a process which is regulated by the Dhaka and Chittagong Stock Exchange Listing Rules where the exchanges have been given the authority to grant exemptions or modify the rules on a case-by-case basis.
If such a transaction were approved, Best Holding Limited itself will not be getting any funds, rather the government banks who have invested in the infrastructure company will offload 5 percent of their investment shares of the company, a process allowed and required by Bangladesh Bank directive.
Insiders interviewed state that the BSEC authorities had been aware of the application of Best Holding Limited. The abrupt special letter on a National Holiday to the Dhaka Stock Exchange came as a surprise to many.
Another regulator involved in this matter is the Bangladesh Bank which has issued a number of directives to promote banks to invest in infrastructure projects.
In its latest circular issued in July this year, Bangladesh Bank asked the infrastructure companies concerned to take necessary steps to allow banks to offload these investment shares thorough direct listing. However, so as not to pressure the share market the sales were limited to a small 5 percent of bank holdings in the first year.
This circular prompted the private infrastructure company Best Holdings Limited, with investments from several government banks, to take action to be listed in the Dhaka and Chittagong stock exchanges through the more direct listing process.
