Mobile Version

| Dhaka, Monday, 20 November 2017

BSEC Gives Active Fine Chemicals Chance to Raise Capital

‘BSEC’s nod for Active Fine Chemicals to raise capital questionable’

2014-10-12 22:17:00
‘BSEC’s nod for Active Fine Chemicals to raise capital questionable’

Rejwan Ahmed, Thereport24.com, Dhaka:

The stockmarket regulator Bangladesh Securities and Exchange Commission (BSEC) has given green light to Active Fine Chemicals Ltd, a chemical reagent and active pharmaceutical ingredients maker, to raise capital from the share market by violating its own rules.

The Active Fine Chemicals got the regulator’s go-ahead to raise public funds showing that it would sell a portion of its stakes to the state-run Investment Corporation of Bangladesh (ICB).

However, the ICB had already informed the listed company that it would not buy its stakes through issuing a letter.

The chemical company got regulator’s approval for enhancing its capital showing that it would sell its shares to ICB as it has no way of raising capital through issuing right shares and repeat public offering (RPO) as it does not fulfill compulsory rule of holding at least 30 percent stake jointly by the company’s directors.

The chemical company applied for floating 2 crore ordinary shares of Tk 10 each at an offer price of Tk 60, including Tk 50 as premium in a bid to raise Tk 120 crore from the capital market.

The BSEC on August 12 approved a go-ahead to the company to raise Tk120 crore from the bourses at its 524th meeting.

Pradeep Ray, chief financial officer of the Active Fine Chemicals confirmed thereport24.com that they had received ICB’s letter saying its intention of not purchasing their shares.

“The ICB informed us that they are not interested in purchasing our shares through issuing a letter,” he said.

When asked why they are using ICB’s name as its institutional client when it is declining to buy its shares, he explained, “The ICB informed them after the company had applied for the BSEC’s nod.”

It has been observed that the offer price of Active Fine has been overvalued largely as analysts say that it could have been at best Tk 25 as per share price considering the fundamentals and economic conditions of the company.

“After getting the BSEC’s nod, the offer price of the company stayed above Tk 60 for around a week and I think it is acceptable considering the situations. I cannot comment on the price as it is not usual initial public offering (IPO),” Pradeep said.

Mizanur Rashid Chowdhury, president of Bangladesh Share Investors’ Association (BSIA) told thereport24.com, “What BSEC is doing now is undoubtedly dubious dealings. It seems to me that they care little about the interest of the small investors but more to serve the purpose of a certain group of influential people. BSEC’s approval is an indication of this.”

Active Fine Chemicals appeared in the market in 2010 through floating 1.6 crore ordinary shares of Tk 10 each to raise the funds. The authorized capital of the company is now Tk 82.80 crore.

When asked about the capital rise of the company, Pradeep said, “As our products have much demand in the market we are trying to enhance the authorize capital. We’ll launch new projects if we could collect additional fund.”

“There might be evil intentions of the company as it is increasing its authorize capital despite having no qualification for issuance of right share and RPO,” Abu Ahmed, a market analyst told thereport24.com.

“The directors of the Active Fine should fulfill the compulsory rule of having 30 percent stakes jointly. They can increase the authorize capital through issuing the right share and RPO,” he said.

“I think selling shares to ICB as logic for capital raising approval is intentional having ill motives. Is BSEC a foolish organization that any company can easily get its nod so cheaply?” he asked in reply.

BSEC spokesman Saifur Rahman, however, told thereport24.com that he is not aware of ICB’s letter.

“I am not sure whether ICB issued any such letter or not. I cannot make comment on the issue immediately. Besides, approving Active Fine to raise capital is BSEC’s technical matter,” he added.

(This report has been translated by Imam Hossain Bijoy and edited by Md. Al-Amin for thereport24.com/English)

Ends/thereport24.com/IH/AMA/ Oct 12, 2014

User Comments:

SMS Alert
Symphony

For Advertisement

+88-01730-787410

Latest News

All News

T
o
p