Tracking the IPO money

The Bangladesh Securities and Exchange Commission (BSEC) though belatedly is on way to accomplishing a very important task soon.
The securities regulator will make it mandatory for the listed companies to inform the shareholders about the use of IPO (initial public offering) funds through their respective websites.
A provision on this account would soon be made, according to a report published in this paper recently, under Section 2CC of the Securities and Exchange Commission Ordinance, 1969 that empowers the regulator to impose any condition anytime it deems fit.
The proposed step of the regulator follows yet another move to ensure detailed disclosure about the plan to use the IPO proceeds. The Public Issue Rules, issued on the last day of the year 2015, incorporated a particular provision in this connection.
Under the existing provision, the issuer companies are required to furnish status report on the use of IPO proceeds, audited by foreign affiliated auditors and authenticated by their boards of directors, to the BSEC and bourses within 15 days after the closing of each month until the full utilisation of the same.
The BSEC's latest measures, obviously, are designed to ensure the use of the IPO proceeds in line with what is promised in the prospectuses by the companies. The regulator and others concerned have good reasons to suspect abuse or wrong use of the money mopped up through the IPOs.
Until recently, the relevant issues did not receive the attention they deserved, from the regulator in particular. Though there is a provision to inform the regulator about the utilisation of IPO funds, not many listed companies bothered to do so. Some did comply with the requirement, but not regularly.
A good number of companies had virtually decamped with investors' funds taking advantage of weak IPO floatation rules and lack of IPO fund use monitoring. Some of those companies are now delisted and some others being traded on OTC (over-the-counter) market.   
The latest public issue rules, if strictly enforced, would make execution of any plan to cheat investors difficult through IPOs. The regulator's move to compel the listed companies to inform the investors about the use of their respective IPO proceeds is, undoubtedly, a well-intended one. But the fact remains that a very few investors go through the financials published in the newspapers before they put in their money in stocks. Rumours, not facts, on most occasions guide their investment decisions.
The onus of monitoring the use of IPO funds, thus, lies with the BSEC. The shareholders do not have the scope to verify the authenticity of information given by companies on their websites. The BSEC has both mandate and manpower to check the veracity of information furnished by the companies.
The regulator concerned needs to expose its biting teeth. Many tend to believe that most regulators in this country, for reasons best known to them, are not as strong as they should be. Relevant laws have given them enough power, yet they tend to be soft on their errant subjects.
A good number of companies listed during last two decades now are not in operation. Their premises are being used for some other purposes. A few listed companies are now missing from their permanent locations and, their sponsors allegedly, have invested the IPO funds in other business activities. Unfortunately, there has not been any investigation in such cases or punishment meted out to the wrongdoers.  
The present Public Issue Rules have done one good thing; it has imposed restriction on the use of more than one-third of the funds mobilised through IPOs in servicing debt by the issuer companies. It is important that funds received from general investors are used for productive investments that would add to the profit of the companies concerned.
By any count, the rules made recently by the BSEC are designed to help both investors and market. But what is needed most is their enforcement of the same. The country has plenty of good laws and those, if enforced duly, would lead to a notable change in the national life. But that would be too much to expect under the prevailing circumstances. Could the BSEC be an exception?
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