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Chinese consortium’s bid

BSEC seeks clarification from DSE on some issues

Mohammad Mufazzal | February 28, 2018 00:00:00

The securities regulator sought clarification from the Dhaka Stock Exchange (DSE) Tuesday on some clauses of the Chinese consortium's proposal, submitted to the premier bourse to be its strategic partner.

The DSE will have to give reply to the Bangladesh Securities and Exchange Commission's (BSEC) letter by March 4.

On Thursday last, the securities regulator formed a four-member body to look into the proposal of the Chinese consortium. After examining the offer, the committee is set to submit its report to BSEC within 10 working days.

The sources concerned said the BSEC committee has sought 'neutral' assessment on the US$37-million technical offer, placed by the Chinese consortium in its bid.

They also said the Chinese consortium also wanted to execute the sales of the DSE shares as per the UK rules.

"In that case, any conflict, if arises, will have to be solved in accordance with the UK arbitration rules. The DSE will have to explain (to BSEC) how they will solve the possible conflicts," said a BSEC official.

Besides, the DSE will require approval of the Chinese consortium in case of inclusion of a new director and taking decision on more than 15 per cent shares of DSE.

"The exchange will have to bring changes in its articles of association to comply with some conditions, proposed by the Chinese consortium. DSE will have to explain whether its shareholders will approve such changes," he added.

When asked, DSE managing director (MD) K A M Majedur Rahman said international arbitration is sometimes required after signing any international agreement.

"The Chinese consortium proposed us (to apply) Hong Kong and the UK arbitration rules for signing the share sale agreement. We have chosen the UK arbitration, as the laws of the UK and Bangladesh are almost similar."

Mr Rahman also said there is scope in the DSE articles of association to take technology services for free from any party. "The change will be required in the articles of association, if we take technology services in exchange for fee."

The DSE MD further said permission is always required from the shareholders in case of taking decision regarding inclusion of a new director or any significant volume of shares. "We will bring about necessary changes in the articles of association, if the regulator gives assurance of accepting our proposal."

The DSE received the BSEC letter on Tuesday and will give reply to the queries within the set timeframe, he added.

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