The securities regulator has decided not to allow National Tea Company (NTC) to utilise the public funds raised through private placements until the government's 51 per cent stakes are ensured.
The decision was made at a meeting on Thursday.
Earlier, the market watchdog gave its permission to the company to raise capital through private placements to reduce loan burden. That resulted in private entities holding a majority stake in the company since government entities did not subscribe to placement shares.
At Thursday's meeting, the BSEC extended the time for subscription of placement shares to March 31, 2025.
At the same time, it formed an inquiry committee to find out the reasons behind the reduction in the government stake.
BSEC spokesperson Mohammad Rezaul Karim said the NTC is a state-run entity and the government's stakes went below 51 per cent after the regulatory approval for raising capital.
Some state-run entities, including Investment Corporation of Bangladesh (ICB), did not subscribe to shares, as expected, in private placements.
"So, the company now will not be able to utilize the funds [raised] until the state-run entities complete subscriptions to ensure 51 per cent stake of the government," Mr. Karim said.
To increase paid-up capital, National Tea in April last year sought regulatory consent to issue 23.4 million shares to existing shareholders to raise Tk 2.8 billion.
But after the issuance of the shares, the government's stake fell to 4.33 per cent from 51 per cent owned by the ICB, the commerce ministry and Sadharan Bima Corporation.
As per the BSEC's decision, the state-run entities were supposed to purchase placement shares allocated proportionately with their previous holdings but they did not or could not as the political regime changed on August 5.
Some controversial businessmen, including Chowdhury Nafeez Sarafat, resigned from the company's board.
The subscription was supposed to be completed between June and September this year.
Now, private entities are major stakeholders in the NTC. The company recently applied to the securities regulator for a time extension until March next year to complete subscription.
The inquiry committee has been asked to find out why placement shares were credited to shareholders before the completion of subscription of all shares. It will have to submit an inquiry report within 60 days.
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