The securities' regulator is set to include a provision of completing the vetting on the scheme prepared for merger and acquisition before seeking the court's approval.
The regulatory plan comes in the backdrop of some complexities while executing the merger and acquisition of some companies following the High Court's (HC) order.
The latest complexities arose while completing amalgamation process of Summit Power which did not allot shares to the shareholders of another listed company before the record date.
A senior official of the securities' regulator said sometimes problems are created when irregularities are found in the merger's scheme approved by the HC.
"The possibility of facing problems in different cases such as capital raising and valuation will be removed if the vetting on the scheme of the merger and acquisition is completed before taking the court's approval," said the BSEC official.
He said investors' interest will also be protected properly if the vetting is completed timely.
To make the merger and acquisition rules time befitting, a four-member body been formed by the securities' regulator is working to recommend on possible changes in the existing rules.
As per existing system, the companies' willing to merge or acquire are required to go the HC as its approval is required for liquidation.
As Substantial Share Inheritance, Acquisition and Takeover Rules of 2002 is not up to mark, the companies are almost exempted from complying with the securities rules.
And the merger and acquisition process is completed taking the HC's approval to scheme as per the Companies Act, 1994.
In some cases, the securities' regulator finds irregularities in share valuation and taking consent for capital raising.
Recently, the securities' regulator became the respondent in a leave to appeal against the HC's order issued for amalgamation of United Power Generation and Distribution Company (UPGDC), as the company's share valuation was not acceptable to the BSEC.
The UPGDC, however, later decided to cancel the amalgamation following the shareholders' decision.
The Summit Power did not take regulatory consent for raising capital in due time as part of completing the company's merger.
The shareholder of another listed company, which has been merged with the Summit Power, also failed to receive shares before record date.
Beximco Group is the pioneer in merger and acquisition in Bangladesh.
In 2005, the group first amalgamated two of its units-Beximco Pharma and Beximco Infusions-into one, Beximco Pharma.
In 2006, Beximco Textiles, Beximco Denims and Beximco Knitting merged with Padma Textile Mills, which later was renamed Bextex and again merged with Beximco.
Bangladesh Online merged with Beximco in 2009. Besides, Dhaka-Shanghai Ceramics, Shinepukur Ceramics, Shinepukur Holdings and Beximco Fisheries also amalgamated with Beximco in different times.
In 2014 Keya Cosmetics initiated the process of merger with its associate companies - Keya Knit Composite, Keya Cotton Mills and Keya Spinning Mills.
Tripti Industries merged with Olympic Industries in 2008, while Keya Detergent was merged with Keya Soap Chemicals in 2010 and Ocean Containers with Summit Alliance Port in 2012.
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