United Airways kicked out from bourse's main board

The Bangladesh Securities and Exchange Commission (BSEC) on Tuesday delisted the now-defunct United Airways (BD) and sent it to the over-the-counter (OTC) market.

United Airways have been grounded since March 7, 2016 and is unlikely to take off again.

Its stock though has been trading as normal on the Dhaka and Chittagong bourses, where they were listed in 2010, but as a junk stock.

Shares of United Airways have been trading at less than their face value of Tk 10 since 2016 at least. Yesterday, they closed at Tk 1.9.

The lapsing stock price is of great concern as 97.5 per cent of United Airways’s shares are in the possession of general investors and institutes.

In other words, sponsor-directors have parachuted off the crashing company, holding just 2.5 per cent of the stakes.

Subsequently, with the view to protecting the interest of investors, the BSEC has decided to remove the company from the mainboard.

From Thursday, shares of United Airways would be traded on the OTC counter, where non-compliant companies are banished to.

The company has simply failed to comply with the rules and take any initiative to revive its business, said BSEC officials.

It had failed to submit various reports and it did not hold any annual general meeting over the last few years. 

The delisting comes after the BSEC last month urged the Bangladesh Police to prohibit Tasbirul Ahmed Chowdhury, the managing director of United Airways, from leaving the country as the regulator was in the process of taking action against him. 

The BSEC in the letter said that Chowdhury raised funds through initial public offerings, repeated public offerings and right offers and sold a significant number of shares in the secondary market where the commission found various rules violations. 

In this context, disciplinary actions against him are in the process, it said. 

Despite being asked to explain the violations in person, Chowdhury failed to show up before the commission, the letter said.

Chowdhury has been the chairman and MD since the airline’s inception.

Established on June 28, 2005, United Airways flagged off its commercial operation on July 10, 2007 with a Dash-8 aircraft.

Within a very short span, it spread its wings to international airspace, with flights to Kolkata, Dubai, Kathmandu, Kuala Lumpur, Jeddah, Muscat and London. 

United Airways operated more than 65,000 international flights and at one point had cornered 60 per cent of domestic air travel.

Dhaka Tribune could not reach Chowdhury for comment.

The OTC market provides an alternative to stock exchange listing for securities of issuers that either chooses not to be listed on Dhaka Stock Exchange or not to meet the relevant listing requirements. 

The term "OTC securities" is a catch-all phrase for any security that is not listed on the stock exchange.

Currently, 64 companies, with a market capitalisation of Tk 51,845.7 crore, are trading at the OTC counter, which started in September 2009 with 51 companies.

Earlier in November last year, the BSEC took a step to clean up the OTC market too.

It asked the twin bourses to appoint special auditors to review the business affairs of 21 companies that are listed on the OTC market and also submit a specific and detailed report on 43 companies that are not in operation as per the records available to the exchange.

Then in September, the BSEC delisting/suspended Bangladesh Chemical Industries, Bangladesh Dyeing & Finishing Industries, Bangladesh Luggage Industries and Bangladesh Zipper Industries from the OTC market.

It had previously delisted GMG Industrial Corporation and Padma Cement.

So for how long United Airways stock manage to stay at the OTC market remains to be seen given the company’s current state.