Dhaka Stock Exchange (DSE) has suspended the trading of Khulna Power Company Ltd (KPCL) shares with effect from Wednesday considering the interests of investors.
The decision of the premier bourse came following a declaration regarding sale of substantial amount of shares by a corporate director.
The board of directors of the DSE took the decision of suspending the KPCL's shares trading at a meeting held on Wednesday.
"There was gap of information in the declaration disseminated to sell the shares by the corporate director of the KPCL. The DSE suspended the company's share trading considering the interest of investors," said DSE managing director K. A. M.Majedur Rahman.
Asked, an official of the KPCL said on anonymity that the problem lies with the DSE.
"There is no legal bar to conduct the sale of the shares of our company," said the official of the KPCL.
Summit Corporation, one of the corporate sponsor-directors of the KPCL, expressed its intention on November 4 to sell above 18.06 million shares out of its total holding of above 63.73 million shares of the company at prevailing market price in the public market through Stock Exchange (DSE) within next 30 working days.
Normally, the sales of substantial amount of shares by sponsor-directors are executed in block market to avoid any negative impact in public market.
The DSE suspended the KPCL's share trading in accordance with Sub Section-7 of Section-9 of the Securities and Exchange Ordinance, 1969 and Regulation 50(1) of the DSE (Listing) Regulations, 2015.
The Sub Section-7 of Section-9 of the Securities and Exchange Ordinance, 1969 reads, "The Commission or a Stock Exchange may, if it considers it to be in the interest of trade or in the public interest so to do, suspend, by order recording the reasons, trading in any listed security."
And the Regulation 50(1) of the DSE (Listing) Regulations, 2015 reads, "The Exchange may suspend trading of any listed securities in the event of contravention of any provisions of these Regulations by the concerned issuer or if the exchange have reason to believe that not all material information is available to the public for efficient price discovery."
The power generation company KPCL, which was listed on the Dhaka bourse in 2010, recommended 30 per cent cash and 10 per cent stock dividend for the year ended on June 30, 2018.
The company disbursed 55 per cent cash dividend in 2017.
The share price of the company closed at Tk 98.40 each on Tuesday at the DSE.
The company's paid-up capital is Tk 3.61 billion and authorised capital is Tk 7.0 billion, while total number of securities is 361.28 million, DSE data shows.
The sponsor-directors own 70.59 per cent stake in the company, while institutional investors own 9.44 per cent, foreign investors 0.76 per cent and the general public 19.21 percent as on September 30, 2018.
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