BSEC gets tough on Doel Group
The Bangladesh Securities and Exchange Commission (BSEC) has made a decision to delist four companies and two debentures of Doel Band of Industries, which will compel the group to return around Tk 57 crore to its investors.
The firms are Bangladesh Chemical Industries, Bangladesh Dyeing & Finishing Industries, Bangladesh Luggage Industries and Bangladesh Zipper Industries.
All of the companies are listed with the over-the-counter market. They aren't performing well and also have not paid any dividends to investors for at least the last decade.
This prompted the BSEC to permanently remove the companies from the country's stock exchanges.
The debentures that are going to be delisted are BD Zipper 14 per cent Debenture and BD Luggage 14 % Debenture.
Now, Doel Group must return around Tk 57 crore to the investors for the delisting, said a high official of the currency markets regulator.
"Investors will get back at least a few of their money," he added.
The stock exchanges will need to maintain an escrow account to come back investor's money at face value or a negotiated price, the commission said in a news release on Tuesday.
An escrow account is an account where funds are held in trust whilst two or more parties complete a transaction.
Doel Band of Industries started its venture in 1981 through manufacturing and marketing of artificial leather and rexine materials by setting up the Bangladesh Chemical Industries in Pagla, Narayanganj, in line with the company's website.
It later added knit and woven fabrics, zippers, nylon and tafetta fabrics, readymade garments and sweaters, sportswear, jackets, travel bags, soft luggage, polypropylene tapes and Portland cement.
Entrepreneurs raise money for a period by issuing debentures, a kind of debt instrument that's not backed by any collateral. There are eight debentures on the DSE board now.
All currently listed debentures are matured and so are still listed because of some incomplete legal proceedings, in line with the BSEC's website.
Due to this fact, they have not returned the amount of money to investors, prompting the BSEC to come up with a strict move.
Investors welcomed the BSEC's decision.
"Your choice will enhance investors' confidence as investors are certain to get their money back that was almost gone," said Abdur Razzaque, a retired government official, who comes with an investment in the stock market.
"It will provide a message to other issuers that there is no chance to cheat investors," he added.
On Tuesday, the commission approved an open-ended mutual fund, SAML Income Unit Fund. The targeted fund is Tk 10 crore.
Of the amount, Tk 1 crore will be funded by sponsors and the others will be open for investors.
The fund manager is Shahjalal Asset Management and the trustee and custodian of the fund will be Sandhani LIFE INSURANCE COVERAGE and Brac Bank respectively.
