Ahmed Shawki
The Dhaka Stock Exchange at a board meeting on Thursday decided not to list Mobil Jamuna Lubricants Bangladesh Ltd with the compensation condition given by the Securities and Exchange Commission.
'The DSE board took the decision as it found the condition is impractical,' DSE senior vice-president Ahasanul Islam told New Age after the meeting.
The SEC on Tuesday asked the DSE to take necessary actions according to the bourse's listing regulations for enlistment of MJL Bangladesh with a condition that the company would compensate its primary share holders from company's premium account if the market price of shares drops below the issue price within six months of its listing.
'Analysing the Companies Act thoroughly we have found that the relevant clause of 57-2c does not allow any company to compensate on such ground,' he said.
'We will send a letter to the commission conveying our decision,' he added.
MJL Bangladesh on January 2 went for an initial public offering with a share price of Tk 152.40 each under the book-building method. As the SEC had suspended the book-building method on January 20 as per a government directive, the company has been facing complications in listing its shares with the bourses.
The company had collected Tk 400 crore from the public offering under a condition given by the SEC that it would buy back its shares if the price falls below its issue price in one month after its listing with the bourses.
The commission, to avoid the legal complications due to the suspension of the book-building method, proposed MJL Bangladesh Ltd to give compensation for the IPO holders for a time frame of six months.
MJL Bangladesh Ltd on last week sent a letter of undertaking on this regard to the SEC where it agreed to the condition given by the commission.
The SEC, meanwhile, sent a letter to the DSE on Thursday allowing the bourse 15 days more for listing of MJL Bangladesh.
As per the existing rules, the MJL Bangladesh's listing is supposed to be completed by March 31.
Read the original story on the daily New Age
