DSE suspends People's Leasing's share trading

The Dhaka Stock Exchange (DSE) has suspended trading of shares in the People's Leasing and Financial Services, a beleaguered non-bank financial institution, from Sunday.
The company's share trading will remain suspended until the DSE receives confirmation from the Bangladesh Bank (BB) on the liquidation of the company, according to an official disclosure published on Sunday.
The DSE board of directors took the decision in accordance with the Dhaka Stock Exchange (Listing) Regulations, 2015, at a meeting held at its board room on Thursday last.
The decision came in the wake of a government directive asking the central bank to liquidate the People's Leasing and Financial Services (PLFS) that saw deterioration of its financial health over the last several years.
The liquidation of PLFS means closing its operations permanently and the government will take action to settle liabilities by selling off its assets. But the central bank, being the regulator, has to obtain approval from the High Court before liquidation.
On June 27 last, the finance ministry instructed the central bank to shut down the company as it has failed to improve its financial position, according to the ministry officials.
The ministry arrived at such a decision after going through a detailed central bank report on the company.
According to the Bangladesh Bank report, the non-bank financial institution has failed to repay the depositors' money even after maturity of the funds. Default loans and net losses of the company have recently escalated as well.
It will be the first liquidation in the financial sector of the country.
As of June 30, retail investors held 67.10 per cent of the non-bank financial institution's stocks and the institutional investors 9.50 per cent, according to the DSE data.
The general shareholders stand to lose more than Tk 1.91 billion and institutional investors Tk 271 million.
The company's consolidated net asset value (NAV) per share was negative Tk 67.66 as on March 31, 2019.
The company's consolidated earnings per share (EPS) stood at negative Tk 5.52, consolidated net asset value (NAV) per share at negative Tk 65.59 and consolidated net operating cash flow per share (NOCFPS) at negative Tk 3.69 for the year ended on December 31, 2018 as against negative Tk 26.68, negative Tk 60.07 and Tk 5.76 respectively for the same period of the previous year.
There is no possibility of shareholders getting anything as the company's net asset value (NAV) per share is so negative, said an analyst.
Each share of the company closed at Tk 3.0 on the DSE on Thursday last, losing 25 per cent within a span of five days as the shareholders raced to dump the shares following the liquidation news.
The company failed to pay dividend in the past four years. The last time it paid dividend was in 2014.
The company's paid-up capital is Tk 2.85 billion, authorised capital is Tk 5.0 billion and the total number of securities is 285.44 million.
The sponsor-directors own 23.21 per cent stakes in the company, while institutions 9.50 per cent, foreign investors 0.19 per cent and the general public 67.10 per cent as of June 30, 2019, the DSE data show.

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