Conversion of shares face value

Mohammad Mufazzal The securities regulator has advised the Investment Corporation of Bangladesh (ICB) and the Bangladesh Shipping Corporation (BSC) to get themselves registered with the Registrar of Joint Stock Companies and Firms (RJSC) to facilitate conversion of face value of their respective shares, officials said. The advice has come following the failure of both ICB and BSC to change the face value of their shares within the deadline. The two public sector entities need consent of parliament to change the denomination of their shares. The Securities and Exchange Commission (SEC) issued a directive to all the listed companies on September 15 asking all listed companies to fix the face value of their shares at a uniform rate of Tk. 10 by November 30. Following conversion, trading of all stocks, except ICB, BSC and Janata Insurance, having a uniform face value of Tk 10 each began from December 4. However, ICB and BSC failed to convert the face value of their stocks due to legal complications. Janata Insurance, which has no legal complication, like ICB and BSC, did not inform the bourses about the problems, if there way any, in changing face value of its shares. The SEC this week sent a letter to ICB and BSC, advising them to start the process of getting registration from the RJSC under the Company Act 1994 for the sake of public interest. The regulator has also asked the companies to inform the SEC about the development and also about measures regarding the change in denomination of shares within seven working days. The SEC also requested the chief executive officers of the Dhaka Stock Exchange (DSE), the Chittagong Stock Exchange (CSE) and the Central Depository Bangladesh Limited (CDBL) to extend necessary cooperation to these companies to complete the conversion process. SEC executive director and spokesperson Mohammad Saifur Rahman said both ICB and BSC will have no bar to convert the face value of their shares after getting registration from the RJSC. The state-owned ICB was established under the Ordinance No. XL of 1976, which said the face value of the company's each share will be Tk 100. On the other hand, the BSC was established under the Bangladesh Shipping Corporation Order 1972. Section 5 (2) of the order said, the amount of the subscribed capital of the corporation may, from time to time, be determined by the government by order published in the official gazette. But the amount shall not be less than Tk 3.50 billion, and the capital shall be divided into fully paid up equal shares of Tk 100 each.