Kazi Zahidul Hasan :
Investment Corporation of Bangladesh (ICB) is facing strong opposition to its plan to invest in shares in the ailing Farmers Bank
Board members, high officials and CBA of the state owned organization are strongly opposed to the move saying it could put their fund at risk as the bank might not be able to repay.
Farmers Bank earlier proposed to sell shares worth Tk355 crore to ICB in order to meet its liquidity crisis.
“We’re against the move because it would put ICB’s
fund at risk,” a leader of the Collective Bargaining Agent (CBA) told The New Nation Friday on condition of anonymity.
He added, “The ICB’s financial position is not strong enough to invest in a troubled bank. The organization is now facing fund crisis.”
ICB recently sought help from the finance ministry to overcome its fund crisis created from the withdrawal of deposits by banks.
“We opposed the investment move as it could complicate the fund shortage of ICB,” a senior ICB official told The New Nation asking not to be named.
He said ICB has invested a significant amount of funds in the capital market to help keep it stable, active and sustainable. It lacks adequate funds to invest in shares of Farmers Bank.
The organization will require Tk355 crore to buy shares of the bank.
“It would not be a wise decision to invest in a falling bank. It will also advisedly impact ICB’s investment in share market,” said the official.
Currently, the ICB has an investment of Tk60 crore in the Farmers Bank. It has bought 4.50 crore shares at a rate of Tk13.33 for per share, with a premium of Tk3.33 each.
If ICB buys the bank’s shares of Tk355 crore further, its total investment in the bank will cross Tk400 crore, making up 26.67 per cent of the bank’s initial paid up capital of Tk1, 500 crore.
“Such a share purchase will be a violation of Bank Company Act,” said the official, adding, “The government is forcing ICB to make fresh investment in a falling bank as part of its political decision.”
Investment Corporation of Bangladesh (ICB) is facing strong opposition to its plan to invest in shares in the ailing Farmers Bank
Board members, high officials and CBA of the state owned organization are strongly opposed to the move saying it could put their fund at risk as the bank might not be able to repay.
Farmers Bank earlier proposed to sell shares worth Tk355 crore to ICB in order to meet its liquidity crisis.
“We’re against the move because it would put ICB’s
fund at risk,” a leader of the Collective Bargaining Agent (CBA) told The New Nation Friday on condition of anonymity.
He added, “The ICB’s financial position is not strong enough to invest in a troubled bank. The organization is now facing fund crisis.”
ICB recently sought help from the finance ministry to overcome its fund crisis created from the withdrawal of deposits by banks.
“We opposed the investment move as it could complicate the fund shortage of ICB,” a senior ICB official told The New Nation asking not to be named.
He said ICB has invested a significant amount of funds in the capital market to help keep it stable, active and sustainable. It lacks adequate funds to invest in shares of Farmers Bank.
The organization will require Tk355 crore to buy shares of the bank.
“It would not be a wise decision to invest in a falling bank. It will also advisedly impact ICB’s investment in share market,” said the official.
Currently, the ICB has an investment of Tk60 crore in the Farmers Bank. It has bought 4.50 crore shares at a rate of Tk13.33 for per share, with a premium of Tk3.33 each.
If ICB buys the bank’s shares of Tk355 crore further, its total investment in the bank will cross Tk400 crore, making up 26.67 per cent of the bank’s initial paid up capital of Tk1, 500 crore.
“Such a share purchase will be a violation of Bank Company Act,” said the official, adding, “The government is forcing ICB to make fresh investment in a falling bank as part of its political decision.”
