SEC decides not to allow listing of MJL, MI Cement
Monday, 14 March 2011
Mohammad Mufazzal
The securities regulator has decided not to allow listing of the Mobil Jamuna Lubricants (MJL) and MI Cement if they fail to fulfill the condition of buy back their shares during a 'specific time.' The regulatory decision came at an urgent board meeting held Sunday at the office of the Securities and Exchange Commission (SEC). The government recently imposed a condition on both the companies to buy back their shares from the intending shareholders if the market prices of the same go down below the offer prices within six months from the date of their listing. The source said, the regulator will inform MJL and MI Cement about its decision. In that case, if the listing becomes impossible, the companies will have to return the IPO (initial public offering) money collected from their shareholders. The MJL collected Tk 6.09 billion against the shares worth Tk 400 million from the investors under the book building method. On the other hand, the MI Cement collected Tk 3.04 billion against the shares worth Tk 300 million using the same method. Earlier, the SEC approved the IPOs of the MJL and the MI Cement after both the companies agreed in writing to buy their shares back if the market prices of the same go down below the offer prices within one month from the day of their respective listing. However, the condition of buying back the shares of these two companies does not relates to the buy-back provision, which is going to be formulated by amending Companies Act 1991. The initiative has been taken only for these two companies considering the interest of shareholders. Meanwhile, the MJL has sought two months' time for listing and the MI Cement has not responded to the call of the SEC. The companies' reluctance to comply with the regulatory decision has further intensified the uncertainty of their listing. The source said, the regulator has made up its conclusion in line with government's decision regarding the listing of these two companies, by taking into account investors' interest. "The SEC will not allow the companies to be listed with bourses without any assurance of returning investors' investment," it said. However, the authorities of the MJL and the MI Cement were not available for comment on the issue, despite repeated efforts over mobile phone set.
The securities regulator has decided not to allow listing of the Mobil Jamuna Lubricants (MJL) and MI Cement if they fail to fulfill the condition of buy back their shares during a 'specific time.' The regulatory decision came at an urgent board meeting held Sunday at the office of the Securities and Exchange Commission (SEC). The government recently imposed a condition on both the companies to buy back their shares from the intending shareholders if the market prices of the same go down below the offer prices within six months from the date of their listing. The source said, the regulator will inform MJL and MI Cement about its decision. In that case, if the listing becomes impossible, the companies will have to return the IPO (initial public offering) money collected from their shareholders. The MJL collected Tk 6.09 billion against the shares worth Tk 400 million from the investors under the book building method. On the other hand, the MI Cement collected Tk 3.04 billion against the shares worth Tk 300 million using the same method. Earlier, the SEC approved the IPOs of the MJL and the MI Cement after both the companies agreed in writing to buy their shares back if the market prices of the same go down below the offer prices within one month from the day of their respective listing. However, the condition of buying back the shares of these two companies does not relates to the buy-back provision, which is going to be formulated by amending Companies Act 1991. The initiative has been taken only for these two companies considering the interest of shareholders. Meanwhile, the MJL has sought two months' time for listing and the MI Cement has not responded to the call of the SEC. The companies' reluctance to comply with the regulatory decision has further intensified the uncertainty of their listing. The source said, the regulator has made up its conclusion in line with government's decision regarding the listing of these two companies, by taking into account investors' interest. "The SEC will not allow the companies to be listed with bourses without any assurance of returning investors' investment," it said. However, the authorities of the MJL and the MI Cement were not available for comment on the issue, despite repeated efforts over mobile phone set.