SEC forfeits Tk 47.7m from refund warrants
Sunday, 17 October 2010
The Securities and Exchange Commission (SEC) has so far forfeited more than Tk 47.7 million from the refund warrants of the applicants who sought IPOs of nine companies beyond the legitimate number, officials said.
The SEC withdrew the amount in two steps following detection of fraudulent practices of seeking more IPOs over the permissible joint and individual applications.
In the first stage ten per cent of the refund warrants was forfeited and in second stage the amount of forfeiture reached fifteen per cent.
Under the SEC rules, one is allowed to submit two applications, one individually and the other jointly, for seeking allotment of shares of the IPO.
But thousands of IPO seekers submitted more than two applications using fake bank accounts and without giving bank details or using same account.
An SEC official said the regulator will remain watchful against the duplication in IPO applications and in that case the amount of forfeiture might be more than fifteen per cent.
"By breaching securities' rules, the individuals have applied for more than two and that's why the regulator has forfeited an amount from their refund warrants," the SEC official said.
The issue manager of Active Fine Chemicals has identified 44,000 duplicate applications out of 1.8 million submitted for the IPOs, whose lottery draw will be held on Monday next.
Out of Tk47.7 million forfeited money, an amount more than Tk. 2.3 million was forfeited from the refund warrants of five listed companies, which recently went public. The companies are: RN Spinning Mills, Provati Insurance, Dhaka Insurance, Grameenphone and Golden Son.
The SEC has forfeited Tk 71250, Tk 0.38 million, Tk 0.37 million, Tk 1.47 million and Tk 27,000 from refund warrants of RN Spinning Mills, Provati Insurance, Dhaka Insurance, Grameenphone and Golden Son respectively.
In January this year, the remaining Tk 45.5 million was withdrawn from the refund warrants of Marico Bangladesh, Islamic Insurance Limited, Dacca Dying and Grameenphone.
In Marico Bangladesh more than Tk. 8.0 million of 110 applicants, in Islamic Insurance Limited more than Tk. 11.5 million of 2306 applicants, in Dacca Dying more than Tk. 9.9 million of 1997 applicants and in Grameenphone Limited more than Tk. 16 million of 1068 applicants have been held up by an order of the SEC.
Earlier, a total of 33,815 false applications were detected against the concluded lotteries of the three initial public offerings (IPOs) -- ICB AMCL Second NRB Mutual Fund, Grameen One Scheme Two and First Security Bank Limited.
Considering the interest of a number of small investors and fearing repercussion in the stock market the SEC then waived the invalidated duplicate IPO applicants from the condition of forfeiture.
But the regulator warned the applicants saying that the SEC would take firm action against offenders in future as per securities rules.
The SEC withdrew the amount in two steps following detection of fraudulent practices of seeking more IPOs over the permissible joint and individual applications.
In the first stage ten per cent of the refund warrants was forfeited and in second stage the amount of forfeiture reached fifteen per cent.
Under the SEC rules, one is allowed to submit two applications, one individually and the other jointly, for seeking allotment of shares of the IPO.
But thousands of IPO seekers submitted more than two applications using fake bank accounts and without giving bank details or using same account.
An SEC official said the regulator will remain watchful against the duplication in IPO applications and in that case the amount of forfeiture might be more than fifteen per cent.
"By breaching securities' rules, the individuals have applied for more than two and that's why the regulator has forfeited an amount from their refund warrants," the SEC official said.
The issue manager of Active Fine Chemicals has identified 44,000 duplicate applications out of 1.8 million submitted for the IPOs, whose lottery draw will be held on Monday next.
Out of Tk47.7 million forfeited money, an amount more than Tk. 2.3 million was forfeited from the refund warrants of five listed companies, which recently went public. The companies are: RN Spinning Mills, Provati Insurance, Dhaka Insurance, Grameenphone and Golden Son.
The SEC has forfeited Tk 71250, Tk 0.38 million, Tk 0.37 million, Tk 1.47 million and Tk 27,000 from refund warrants of RN Spinning Mills, Provati Insurance, Dhaka Insurance, Grameenphone and Golden Son respectively.
In January this year, the remaining Tk 45.5 million was withdrawn from the refund warrants of Marico Bangladesh, Islamic Insurance Limited, Dacca Dying and Grameenphone.
In Marico Bangladesh more than Tk. 8.0 million of 110 applicants, in Islamic Insurance Limited more than Tk. 11.5 million of 2306 applicants, in Dacca Dying more than Tk. 9.9 million of 1997 applicants and in Grameenphone Limited more than Tk. 16 million of 1068 applicants have been held up by an order of the SEC.
Earlier, a total of 33,815 false applications were detected against the concluded lotteries of the three initial public offerings (IPOs) -- ICB AMCL Second NRB Mutual Fund, Grameen One Scheme Two and First Security Bank Limited.
Considering the interest of a number of small investors and fearing repercussion in the stock market the SEC then waived the invalidated duplicate IPO applicants from the condition of forfeiture.
But the regulator warned the applicants saying that the SEC would take firm action against offenders in future as per securities rules.