Rupali handover delay frustrates shareholders
Saturday, 29 December 2007
Kayes M Sohel
A delay in resolving Rupali Bank hand-over issue is frustrating for its shareholders as the trading of the bank shares has remained suspended for about two months.
The Rupali Bank, a Z-category issue, accounts for 5.8 per cent of the Dhaka Stock Exchange (DSE) total market capitalisation, which is one of the highest among the listed companies.
Around seven per cent of the bank share is held by general public. It has a total of 12,500,000 shares, each having a face value of Tk 100.
Expressing concern over the lengthy disinvestment process of the Rupali Bank, Rajib, one of the stock investors of the bank, said, "It is really frustrating as the government could not complete the disinvestment task in the last one year."
Rajib said he has large investment in the bank's stocks and it has been stuck up for about two months as the country's bourses suspended the trading of the bank shares due to volatility of its price.
Privatisation Commission Chairman (PC) Abu Solaiman Chowdhury was not available for comment.
The PC chairman Thursday last held a meeting with representatives of Bangladesh Bank (BB) and Securities and Exchange Commission(SEC) to discuss about Rupali Bank issue, sources said.
Talking to the FE, PC member Faruq Ahmad Siddiqui said, the meeting did not take any decision on the Rupali Bank issue. "This was just an informal meeting," he said.
He said high-ups of the government will decide on this important matter.
Talking to the FE professor of economics of Dhaka University (DU) said: "The procrastination in the handover process gives rise to rumour about the fate of the bank's sell-off to the Saudi prince, which is not desirable as stock investors feel frustrated and disappointed."
"The government and the market regulatory authority should sit as early as possible to find the ways and means to resolve the issue," he said.
Abu Ahmed noted that the government has nothing to lose if it offloads the bank's shares through the stock exchanges in case the divestment process fails.
Frequent fluctuation of the Rupali Bank share prices caused by the media reports on disinvestments process of the banks forced the DSE authorities to suspend the trade on November 5 this year for an indefinite period.
"The prime bourse was compelled to stop trading of the Rupali Bank issues to protect the interest of the investors," a DSE source said. The trading of the Rupali Bank will remain halted until any precise information about Rupali Bank is received, he added.
The price of a Rupali Bank share surged to Tk 3200 from Tk only 472 over a period of 52 weeks before the suspension of the trade.
The Saudi prince Bandar Bin Mohammad Abdulrahman Al Saud, the highest bidder, remained non-responsive in the last one year despite repeated reminders by the PC to take over the bank. The immediate past political government put 67.5 per cent of Rupali shares on sale in 2004.
The PC that was assigned to complete the sale-bid declared the Saudi prince as the highest bidder for offering $330 million.
Later, the caretaker government decided to sell the remaining 26 per cent government share of bank at $134 million to the Saudi prince in November 2006. Since then the PC was waiting for Saudi prince response to strike the final deal.
A delay in resolving Rupali Bank hand-over issue is frustrating for its shareholders as the trading of the bank shares has remained suspended for about two months.
The Rupali Bank, a Z-category issue, accounts for 5.8 per cent of the Dhaka Stock Exchange (DSE) total market capitalisation, which is one of the highest among the listed companies.
Around seven per cent of the bank share is held by general public. It has a total of 12,500,000 shares, each having a face value of Tk 100.
Expressing concern over the lengthy disinvestment process of the Rupali Bank, Rajib, one of the stock investors of the bank, said, "It is really frustrating as the government could not complete the disinvestment task in the last one year."
Rajib said he has large investment in the bank's stocks and it has been stuck up for about two months as the country's bourses suspended the trading of the bank shares due to volatility of its price.
Privatisation Commission Chairman (PC) Abu Solaiman Chowdhury was not available for comment.
The PC chairman Thursday last held a meeting with representatives of Bangladesh Bank (BB) and Securities and Exchange Commission(SEC) to discuss about Rupali Bank issue, sources said.
Talking to the FE, PC member Faruq Ahmad Siddiqui said, the meeting did not take any decision on the Rupali Bank issue. "This was just an informal meeting," he said.
He said high-ups of the government will decide on this important matter.
Talking to the FE professor of economics of Dhaka University (DU) said: "The procrastination in the handover process gives rise to rumour about the fate of the bank's sell-off to the Saudi prince, which is not desirable as stock investors feel frustrated and disappointed."
"The government and the market regulatory authority should sit as early as possible to find the ways and means to resolve the issue," he said.
Abu Ahmed noted that the government has nothing to lose if it offloads the bank's shares through the stock exchanges in case the divestment process fails.
Frequent fluctuation of the Rupali Bank share prices caused by the media reports on disinvestments process of the banks forced the DSE authorities to suspend the trade on November 5 this year for an indefinite period.
"The prime bourse was compelled to stop trading of the Rupali Bank issues to protect the interest of the investors," a DSE source said. The trading of the Rupali Bank will remain halted until any precise information about Rupali Bank is received, he added.
The price of a Rupali Bank share surged to Tk 3200 from Tk only 472 over a period of 52 weeks before the suspension of the trade.
The Saudi prince Bandar Bin Mohammad Abdulrahman Al Saud, the highest bidder, remained non-responsive in the last one year despite repeated reminders by the PC to take over the bank. The immediate past political government put 67.5 per cent of Rupali shares on sale in 2004.
The PC that was assigned to complete the sale-bid declared the Saudi prince as the highest bidder for offering $330 million.
Later, the caretaker government decided to sell the remaining 26 per cent government share of bank at $134 million to the Saudi prince in November 2006. Since then the PC was waiting for Saudi prince response to strike the final deal.