Pragati's 'clandestine' sale of city plots irks DSE
Thursday, 20 May 2010
FE Report
The leaders of Dhaka Stock Exchange (DSE) have alleged that Pragati Insurance Limited sold its plots with a size of 82.42 kathas at a lower price leaving its investors in the dark, despite the company's strong position in maintaining legal procedures.
DSE president said Wednesday the Exchange was not able to buy the Pragati plots situated on the city's Panthapath due to the secrecy the company maintained in the process.
On May 17 this year, Pragati sold its plots to M/s Zara Holdings Limited at the price of Tk 17.2 million per katha.
DSE said it would decide at the board meeting on Thursday (today) on the further action for acquisition of the plots.
They have also sent a letter to the Securities and Exchange Commission (SEC) Wednesday seeking its help in stopping the transfer of the plots.
DSE said they had informed the company about buying its plots based on the decision of the board of directors taken on February 2010.
Later on, DSE sent three letters to Pragati regarding their willingness to buy the company's plots.
Meanwhile, the share prices of Pragati demonstrated an unusual upward trend and the trade volume also increased considerably.
But DSE did not receive any reply from the company and on May 17 it came to know that the company had sold the plots to Zara Holdings.
"Without inviting open or sealed tenders, Pragati sold the plots at a lower price, which deprived its investors of getting profit. As a bidder, DSE also failed to buy the plots in spite of pursuing proper legal procedures," DSE president Shakil Rizvi said.
Pragati, however, said after getting the first letter from DSE the company also sent three letters to DSE.
But the company did not receive any reply from DSE regarding their price quotation in buying the plots.
Pragati also said that by the end of the last year, the company invited tenders through one English and one Bengali newspaper.
But nobody showed interest in quoting price as the plots were situated in a high-demand area of the city.
"Later on, we sent letters to 62 developers and a few financial institutions to invite them to participate in the bidding process. But they were unable to buy the plots due to barriers of undisclosed money," Rafiqul Islam, the Managing Director (MD) of Pragati, told the FE.
"Then only Zara Holdings agreed to buy the plots setting the condition of payment in installment," he said.
Md. Rakibur Rahman, the immediate-past president of DSE, said, "the directors of the Pragati made profit by selling the plots without inviting tenders for competitive bidding process."
On the other hand, Pragati's MD said there was no chance to pocket the money as the decision of selling the plots was taken at the board meeting.
Mr Rakubur said DSE is still now willing to buy the land at the price of Tk 25 million.
The leaders of Dhaka Stock Exchange (DSE) have alleged that Pragati Insurance Limited sold its plots with a size of 82.42 kathas at a lower price leaving its investors in the dark, despite the company's strong position in maintaining legal procedures.
DSE president said Wednesday the Exchange was not able to buy the Pragati plots situated on the city's Panthapath due to the secrecy the company maintained in the process.
On May 17 this year, Pragati sold its plots to M/s Zara Holdings Limited at the price of Tk 17.2 million per katha.
DSE said it would decide at the board meeting on Thursday (today) on the further action for acquisition of the plots.
They have also sent a letter to the Securities and Exchange Commission (SEC) Wednesday seeking its help in stopping the transfer of the plots.
DSE said they had informed the company about buying its plots based on the decision of the board of directors taken on February 2010.
Later on, DSE sent three letters to Pragati regarding their willingness to buy the company's plots.
Meanwhile, the share prices of Pragati demonstrated an unusual upward trend and the trade volume also increased considerably.
But DSE did not receive any reply from the company and on May 17 it came to know that the company had sold the plots to Zara Holdings.
"Without inviting open or sealed tenders, Pragati sold the plots at a lower price, which deprived its investors of getting profit. As a bidder, DSE also failed to buy the plots in spite of pursuing proper legal procedures," DSE president Shakil Rizvi said.
Pragati, however, said after getting the first letter from DSE the company also sent three letters to DSE.
But the company did not receive any reply from DSE regarding their price quotation in buying the plots.
Pragati also said that by the end of the last year, the company invited tenders through one English and one Bengali newspaper.
But nobody showed interest in quoting price as the plots were situated in a high-demand area of the city.
"Later on, we sent letters to 62 developers and a few financial institutions to invite them to participate in the bidding process. But they were unable to buy the plots due to barriers of undisclosed money," Rafiqul Islam, the Managing Director (MD) of Pragati, told the FE.
"Then only Zara Holdings agreed to buy the plots setting the condition of payment in installment," he said.
Md. Rakibur Rahman, the immediate-past president of DSE, said, "the directors of the Pragati made profit by selling the plots without inviting tenders for competitive bidding process."
On the other hand, Pragati's MD said there was no chance to pocket the money as the decision of selling the plots was taken at the board meeting.
Mr Rakubur said DSE is still now willing to buy the land at the price of Tk 25 million.