The securities' regulator and the issuers are locked in a row over the present delay in approval process of the IPO (initial public offering) proposals especially submitted under book building method.
According to the some issuers and issue managers, they are yet to get the regulatory approval to the IPO proposals submitted more than one year ago.
On the other hand, the officials of the Bangladesh Securities and Exchange Commission (BSEC) said the regulatory approval is delayed due to the issuers' 'insincerity' to fulfill the deficiencies found in IPO proposals.
While talking to the FE, some issuers said they are unable to execute the plan of raising funds due to delay in getting timely approval.
"Since the enactment of revised public issue rules in December, 2015 only the ACME Laboratories went public under the book building method," the issuer said on anonymity.
He said there should be a specific time frame and the regulatory stance to say 'yes' or 'no' to an IPO proposal.
An issue manager also said on anonymity that in India it takes around two and a half months between submission of IPO proposal and starting of debut trading.
"It takes more than 10 months to get final approval to an IPO proposal under book building method," said the issue manager, adding that another two weeks are required to prepare even the minutes of a commission meeting that approves an IPO proposal.
ACME Laboratories submitted the IPO proposal before the amendment of public issue rules that came into effect in December, 2015. Later, the company went public conducting the price bidding as per the revised rules.
Afterwards, only the Aamra Networks recently completed the bidding process under book building method and is awaiting the securities regulator's final consent under the book building method.
The BSEC, however, approved eight IPO proposals under fixed price method after enactment of revised public issue rules.
Presently, 12 IPOs worth above Tk 9.71 billion and 12 IPOs worth Tk 2.10 billion are awaiting the regulatory approval under book building method and fixed price method respectively.
Mohammad Saifur Rahman, a BSEC executive director, said the regulatory approval to any IPO proposal depends on fulfillment on deficiencies.
"After getting an IPO proposal the concern department examines the proposal. Then the company is asked to fulfill the deficiencies," said Rahman, also a BSEC spokesperson.
He said in some cases the companies are asked repeatedly to fulfill the deficiencies.
"The companies orally say that the regulator takes time to approve the IPO proposals. But they are not sincere to fulfill the deficiencies," said Rahman, adding that a company will get approval as early as possible it will fulfill the deficiencies.
Dr. AB Mirza Azizul Islam, a former chairman of the securities regulator, said the objective should be to expedite the approval process subject to fulfillment of all requirements.
A BSEC commissioner said normally it takes around 180 days if the issuers and concern departments, including the stock exchanges, works properly.
"If the deficiencies are not fulfilled by the issuers timely then it's not possible to give final approval within any specific time period," the commissioner said.
He said in some cases the issuers sometimes are not able to fulfill some requirements such as environmental clearance in proper time.
"The regulator has also the shortage of manpower. The time frame of approving IPO proposals will be reduced more if the proposed e-data submission process is introduced," the commissioner added.
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