BSEC, DSE open seperate probes into merger process of Summit Power

The move came after the country’s two stock exchanges suspended share trading of Summit Power for an indefinite period on Wednesday evening due to alleged non-compliance with the High Court’s merger directive. DSE formed a three-member committee yesterday to investigate whether the High Court’s order was followed properly in completing merger of Summit Power’s three power generation units. The DSE body has been asked to submit probe report within next three working days and to assist Bangladesh Securities and Exchange Commission’s (BSEC) committee in the investigation. On Friday night, the regulator had formed a four-member committee in the same issue. The BSEC body was asked to submit the probe report within the next 15 working days. “BSEC is looking into whether the shareholders’ interest was protected in completing the amalgamation process of Summit Power,” said an official in BSEC. A Summit Power spokesperson said the company will cooperate fully with the inquiry, but declined to provide details of what is being investigated. According to the merger scheme, Summit Power, a subsidiary of the Group and the country’s first private power generation firm, acquired shares of its three power generation units—Summit Purbanchol Power Company Limited (SPPCL), Summit Uttranchol Power Company Limited (SUPCL) and Summit Narayanganj Power Company Limited (SNPCL). On Wednesday, share prices of Summit Power fell marginally 0.6% to over Tk32 a share. Earlier on last March 16, Summit Power announced merger with three of its subsidiaries as part of a new business strategy of its parent company, Summit Group. The High Court approved the amalgamation on July 14. To acquire the units, Summit Power exchanged its 1.309 shares for one share of SPPCL, 1.668 shares for one share of SUPCL and 1.475 shares for one share of SNPCL. Share value worked out for non-listed subsidiaries, SUPCL and SNPCL, at their weighted average of net asset value as of 2015 and average market price for six months to December 31, 2015. For listed subsidiary, SPPCL, the share value was fixed on the basis of share value at its weighted average of net asset value as of 2015.