The High Court (HC) has stayed the IPO (initial public offering) process of Indo-Bangla Pharmaceuticals Limited for six months as four directors of the company are 'loan defaulters' as guarantors, a jurist said.
The stay order issued following a writ petition filed by National Bank Limited (NBL) over non-payment of loans the bank earlier disbursed to Indo-Bangla Pharmaceuticals Works, the previous name of the company.
Advocate Mukunda Chandra Debnath, a lawyer of the NBL, said name of Indo-Bangla Pharmaceuticals Limited was derived from Indo-Bangla Pharmaceuticals Works.
"Four directors of Indo-Bangla Pharmaceuticals Limited were the guarantors of the loans earlier disbursed to Indo-Bangla Pharmaceuticals Works. That's why the four directors of Indo-Bangla Pharmaceuticals Limited are also loan defaulters as guarantors," he said.
Mr Mukunda said the NBL had earlier filed a case with Barishal Artha Rin Adalat against Indo-Bangla Pharmaceuticals Works over the non-payment of a loan worth more than Tk 141.50 million.
The managing director of Indo-Bangla Pharmaceuticals Limited had no CIB (Credit Information Bureau) clearance before applying for IPO approval, he added.
"After obtaining an order of stay of the CIB report of the managing director from the HC, the company submitted IPO proposal to the securities regulator. Later, the HC vacated the stay order following another petition filed by the NBL," Mr Mukunda said.
He the securities regulator cannot approve the IPO proposal of any company if any of its directors is loan defaulter.
"The company, however, appealed against the stay order and the Appellate Division has fixed the date of hearing on Thursday (today)," he added.
The officials of the Indo-Bangla Pharmaceuticals Limited and issue manager could not be reached for their comment.
Bangladesh Securities and Exchange Commission approved the IPO proposal of Indo-Bangla Pharmaceuticals Limited on October 3, 2017.
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