The securities' regulator and both the bourses are now in the soup over some 'irregularities' in completing the amalgamation process of Summit Power and three other companies.
Following an order of the High Court (HC), the listed company Summit Power recently started its amalgamation process with three other companies --Summit Purbanchol Power Company Ltd (SPPCL), Summit Uttaranchol Power Company Ltd (SUPCL) and Summit Narayanganj Power Ltd (SNPL).
Among the companies, SPPCL is also listed on both the stock exchanges in Dhaka and Chittagong.
According to the officials of the securities' regulator, some relevant steps were not completed and shares of Summit Power were also not made available to the shareholders of SPPC and two others within the record date.
Following verbal instructions of the Bangladesh Securities and Exchange Commission (BSEC), the premier bourse formed a probe body and both the stock exchanges took temporary measures against six senior officials, according a BSEC official.
The securities regulator formed a four-member body on Friday night through an administrative order to probe into lapses on part of the responsible persons within fifteen working days.
Meanwhile, both the Dhaka and Chittagong Stock Exchanges Saturday held board meetings to know about the incidents that occurred during the amalgamation of Summit Power.
After the meetings some board members of both the stock exchanges said they were not in a comfortable position to speak about the issue.
"Previous amalgamations were completed in the same procedure adopted for the Summit Power and the regulator raised no question," said one board member of the Dhaka Stock Exchange (DSE).
He said the problem could have been avoided through an amicable way.
A CSE board member said their board came to know about the matter from the managing director.
"Our exchange is working to solve the problem. After completion of the BSEC investigation, it will be clear more about the irregularities," said another CSE board member.
A senior BSEC official said the securities regulator asked the bourses to take measures against those responsible for the mismatch that occurred while declaring the record date for the amalgamation.
Following the regulatory instructions, the Chittagong Stock Exchange (CSE) suspended its three senior officials.
On the other hand, the Dhaka Stock Exchange (DSE) made a senior official OSD and asked the Committee of Regulatory Affairs to take disciplinary action against two other seniors.
At the same time, the DSE formed a body to submit a report within three working days.
According to a BSEC official, the High Court (HC) gave consent in favour of amalgamation of the Summit Power on July 14, stating that the process will have to be completed within eight weeks of getting certified copy of the HC order.
He said the company got the certified copy on July 26 and declared the record date for SPPC on August 23.
According to a DSE disclosure, the number of post-amalgamation paid-up shares of Summit Power Limited will be increased by 191,876,506 shares.
The BSEC official said the shareholders of other three companies were supposed to get shares of Summit Power by the record date. And the DSE also mentioned the number of Summit Power's shares to be increased after amalgamation.
"But no share of the Summit Power was disbursed to the shareholders of other three companies, including the listed company SPPC, by the record date," the securities official said.
He said the issuer company also did not apply to the commission for raising capital through issuance of new shares which will be disbursed to shareholders of other three companies.
"Without noticing these regularities seriously, the DSE delisted the SPPC.
"The record date could have been declared later as there was enough time as per the deadline set by the higher court," the BSEC official added.
Asked, former BSEC chairman Faruq Ahmad Siddiqi said the securities regulator and stock exchanges both should be 'amicable' in resolving the complexity while completing amalgamation process of the Summit Power in shareholders' interest.
After Saturday's board meeting, DSE director Rakibur Rahman said the board was informed about the regulatory instructions.
"At the meeting, it was also discussed as to how the DSE probe body will work," said Mr Rahman, also a former DSE president.
Summit Power officials could not be reached to make comment over the alleged irregularities in completing the amalgamation process of Summit Power and three other companies.
According a BSEC official, at a meeting held with the securities regulator the Summit Power had said they would complete relevant steps soon.
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