The Securities and Exchange Commission will ask the two bourses today to end the stalemate over the listing of MI Cement Factory Ltd for “greater interests of investors”.
The SEC discussed the listing plan with both bourses and set the company a condition of compensations from the directors’ accounts, at a meeting presided over by SEC Chairman Ziaul Haque Khondker.
MI Cement will have to deposit Tk 5 crore in security funds to compensate the investors if the share prices go below the offer price within the first six months of trade. Also, the company will have to set aside a fourth of total shares from the directors’ portion for the bourses. If the compensation amount crosses Tk 5 crore, the exchanges could go for selling those shares.
An SEC official said the market would get some liquidity when the company gets listed, he added.
Mukter H Talukder, general manager of MI Cement, told reporters that the company would meet all conditions set by the commission for listing.
MI Cement has already raised Tk 335.05 crore from the capital market under the book-building method by floating 3 crore ordinary shares with Tk 10 in face value per share and at an indicative price of Tk 111.6.
Data submitted by the company to the DSE shows earnings per share of MI are Tk 93.87 and net asset value is Tk 37.01 per share as on June 2009.
Earlier, the SEC asked the company to buy back shares, if its share prices slip below the offer price within the first six months of trading, and asked the bourses to take proper actions as per the listing rules.
But the listing committee of bourses opposed the move on a condition of buy-back, saying huge complexities would arise if the company is listed.
A stalemate was created over the listing of MJL that used the book building method for its IPO after the stockmarket regulator suspended the method in January following a government instruction.
A volley of criticisms came from economists, market experts, analysts and stakeholders over the misuse of the mechanism.
MJL Bangladesh is yet to take any decision of compensation from the directors’ account to be listed in the bourses.
MJL offered 30 percent bonus shares to the shareholders but the listing committee opposed it because before listing in the market a company cannot issue bonus shares.
Source: The daily star, 25 April, 2011