A review committee of stock market regulator Bangladesh Securities and Exchange Commission (BSEC) has been asked to submit the report on March 14
The deadline for submission of a report on selection of a strategic investor of Dhaka Stock Exchange has been extended by five workdays.
A review committee of stock market regulator Bangladesh Securities and Exchange Commission (BSEC) has been asked to submit the report on March 14.
The report was supposed to be submitted by Wednesday. However, the deadline was extended as the committee’s convener BSEC Executive Director Forhad Ahmed Shikdar appealed to the BSEC chairman, seeking more time to review the DSC’s proposal to pick a Chinese consortium as its strategic investor and the clarifications sought from the DSE.
Earlier, the BSEC sought some clarification from the DSE of the proposed strategic partnership with the Chinese consortium comprised of Shenzhen Stock Exchange and Shanghai Stock Exchange. It also asked the DSE to explain the conditions the consortium had proposed as part of the deal to become a strategic investor of the premier bourse.
A DSE official seeking anonymity said the commission had found several inconsistencies in the Chinese proposal that conflict with Bangladeshi laws, and asked the DSE to explain them.
Asked, DSE Managing Director KAM Majedur Rahman said: “BSEC sent us a letter seeking clarification of the Chinese consortium’s conditions, and we explained them to the commission on time”
The DSE board of directors on February 19 decided to sell 25% of its shares to the consortium, considering it a strategic investor.
Later that week, the DSE submitted a proposal to the BSEC for approval of the deal.
DSE officials said the Chinese consortium proposed the strategic partnership be formulated in accordance with Hong Kong laws.
It also suggested the DSE board get approval from the consortium before taking any other strategic investor on board.
The consortium also recommended bringing some changes to the DSE charter, including getting its approval before issuing new shares and reconsidering the number of directors and other matters.
The BSEC review committee, formed on February 22, in its observations said, however, that these conditions are illegal and there are no scopes for considering them.
Majedur said: “The points the BSEC has raised are not major issues.
In their proposal, the consortium proposed to buy 25% shares of the DSE at a rate of Tk22 each.
It also offered technical support of Tk307 crore and asked for a seat on the board, adding that it would not seek any return on its investment for a period of 10 years.
A proposal was also received from National Stock Exchange (NSE) of India, which offered a lower price than that offered by the Chinese consortium.
NSE offered Tk15 per share for the same number of shares and demanded two seats on the DSE board. The Indian body offered technical support, but it did not clarify how much money it would spend.
The DSE board said it considered the Chinese offer the best in terms of value and technical support.
DSE sources said the commission had put pressure on the DSE management to pick the NSE over the consortium as the strategic partner.
The sources claimed that the BSEC’s challenge of the second strategic partnership condition was a further attempt to include the NSE exchange in the deal.
This article was first published on banglatribune.com