The Bangladesh National Insurance Company (BNIC) has allegedly changed its share-holding ratio without taking prior approval from its regulatory body.
This was revealed in a number of letters issued to the Bangladesh Securities and Exchange Commission, Registrar of Joint Stock Companies and Firms and the Company by the insurance regulator -- IDRA-- last week.
The non-life company's public subscription will begin on June 30. It will raise Tk 177 million from the general public (through Initial Public Offering).
Insurance Development and Regulatory Authority (IDRA) also issued a show cause notice against the company as to why punitive actions would not be taken for such offences. It will have to reply by Thursday (tomorrow).
Originally, the company had Tk 150 million paid-up capital during its inception in 1996. And the holding of share was 40:60 --- sponsor's portion was 40 per cent and the general and institutional portion 60 per cent.
The authorised capital was Tk 200 million. But it has changed its authorised capital to Tk 1.0 billion and paid-up capital also Tk 1.0 billion, according to the IDRA letters.
Most importantly, the ratio of shares holding in the company has been made completely reverse to 60:40, i.e. sponsor's part will hold 60 and the general shareholder and institutional will consist 40 per cent.
IDRA officials said the company must have prior permission before making changes in such type of shares and ratios.
When contacted, BNIC Chairman Abdul Baset Majumder said they will now take permission from the regulator.
"We'll seek permission from the authority and let us see what will happen," Mr Majumder, also a renowned lawyer, told the FE.
When contacted, BSEC spokesperson Saifur Rahman said they will examine whether the company failed to meet any compliance.
"We'll mainly focus on whether the company has fulfilled all the compliance," he added.
However, a close associate with the BNIC management said the issue manager was not aware of the matter.
jasimharoon@yahoo.com
