SEC for conditional approval to go public
Syful Islam | Wednesday, 6 April 2011
Syful Islam
The Securities and Exchange Commission (SEC) has opined to offer conditional approval of floating initial public offerings (IPO) by the insurance companies with low paid up capital, officials said Tuesday. The Insurance Act 2010 has set paid up capital for life and general insurance companies to Tk 300 million and Tk 400 million respectively. In line with the act, SEC in November last year has set minimum paid up capital to Tk 300 million for insurance companies intending to float IPO. Besides, it set the minimum IPO size at Tk 120 million which won't be less than 10 per cent of the paid up capital of the company. Insurance companies which started business under the Insurance Act-1938 got approval with paid up capital for life insurance at Tk 75 million and for general insurance Tk 150 million. With the new act passed in the parliament last year, many existing insurance companies whose paid up capital is below the newly set minimum level failed to go public. The Ministry of Finance last month sought opinion of the SEC on how to allow the existing insurance companies to float IPO with paid up capital below the new minimum level. The SEC on Sunday last opined that the insurance companies can get approval to float IPO and those can be given time to raise their paid up capital within a time frame. Besides, they can be allowed to raise paid up capital through issuing rights and bonus shares. But they won't be allowed to pay cash dividend before their paid up capital reach at newly set minimum level. Secretary General of Bangladesh Insurance Association (BIA) Molla Nurul Islam told the FE that a good number of insurance companies failed to float IPO due to the newly set minimum paid-up capital. A total of 60 private insurance companies, including a foreign company, are now operating in the country. Of them, 18 are life insurance, and 42 are the general insurance, companies. Besides, two state-owned entities -- Jiban Bima Corporation (JBC) and Sadharan Bima Corporation (SBC) -- are also operating in life and insurance business respectively. Some 44 insurance companies with an issued capital worth Tk.9.08 billion are listed with the stock exchanges. The insurance sector witnessed a growth of about 30 per cent last fiscal which in China was 34 per cent and in India 32 per cent.
The Securities and Exchange Commission (SEC) has opined to offer conditional approval of floating initial public offerings (IPO) by the insurance companies with low paid up capital, officials said Tuesday. The Insurance Act 2010 has set paid up capital for life and general insurance companies to Tk 300 million and Tk 400 million respectively. In line with the act, SEC in November last year has set minimum paid up capital to Tk 300 million for insurance companies intending to float IPO. Besides, it set the minimum IPO size at Tk 120 million which won't be less than 10 per cent of the paid up capital of the company. Insurance companies which started business under the Insurance Act-1938 got approval with paid up capital for life insurance at Tk 75 million and for general insurance Tk 150 million. With the new act passed in the parliament last year, many existing insurance companies whose paid up capital is below the newly set minimum level failed to go public. The Ministry of Finance last month sought opinion of the SEC on how to allow the existing insurance companies to float IPO with paid up capital below the new minimum level. The SEC on Sunday last opined that the insurance companies can get approval to float IPO and those can be given time to raise their paid up capital within a time frame. Besides, they can be allowed to raise paid up capital through issuing rights and bonus shares. But they won't be allowed to pay cash dividend before their paid up capital reach at newly set minimum level. Secretary General of Bangladesh Insurance Association (BIA) Molla Nurul Islam told the FE that a good number of insurance companies failed to float IPO due to the newly set minimum paid-up capital. A total of 60 private insurance companies, including a foreign company, are now operating in the country. Of them, 18 are life insurance, and 42 are the general insurance, companies. Besides, two state-owned entities -- Jiban Bima Corporation (JBC) and Sadharan Bima Corporation (SBC) -- are also operating in life and insurance business respectively. Some 44 insurance companies with an issued capital worth Tk.9.08 billion are listed with the stock exchanges. The insurance sector witnessed a growth of about 30 per cent last fiscal which in China was 34 per cent and in India 32 per cent.