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Tangles over DSE stake selloff

Quick move on redeeming China's buying bid

FE Report | March 22, 2018 00:00:00

Amid some faster developments, the board of directors of Dhaka bourse asked Wednesday its management to submit to the regulator a revised Chinese consortium proposal for buying a stake in the stock-market.

Officials said the management was told to do it forthwith as per the regulatory instructions that had stalled the DSE decision in favour of the Chinese consortium-the highest bidder.

The Bangladesh Securities and Exchange Commission (BSEC) reserved its decision and asked Monday the Dhaka Stock Exchange (DSE) operators to submit a revised proposal of the consortium comprising Shenzhen Stock Exchange and Shanghai Stock Exchange by fulfilling five conditions.

On Wednesday, the Chinese mission in Dhaka in an open observation at a press conference requested the authorities to remove roadblocks to a square deal in the bourse's stipulated stake selloff.

"We will hold extraordinary general meeting (EGM) as per procedure to fulfill the regulatory condition regarding taking shareholders' approval for share-purchase agreement with Chinese Consortium," said DSE managing director KAM Majedur Rahman.

The Chinese consortium earlier had qualified in a bidding called by the premier bourse, DSE, to sell its 25 per cent stakes to a strategic partner under a move to give a much-needed fillip to the stock-market.

Packaged with a $37 million technical offer for free, the consortium offered Tk 22 for each of 25 per cent shares of the premier bourse.

The DSE managing director said before preparing the revised proposal both the DSE and Chinese Consortium are also required to be agreeable to make the proposal befitting as per the regulatory instructions.

"We are optimistic about submission of the revised proposal fulfilling the conditions set by the BSEC," Mr Majedur said.

Of five conditions tagged by the BSEC, the share-purchase agreement shall not have any terms and conditions that may contradict laws of the land, and run against the interests of general shareholders of the DSE and the development of the capital market.

Another condition says there should not be any proposal for amending the existing provisions of the Memorandum and Articles of Association of DSE in order to accommodate the offer of the consortium.

"The offer along with the share-purchase agreement should be approved by general shareholders before submission to the commission for final approval," the condition reads.

The BSEC also asked the DSE to circulate the BSEC Committee's findings and subsequent withdrawal of the terns and conditions by the consortium to the shareholders with notice of the general meeting.

"The DSE shall submit the minutes of the general meeting along with final offer, revised share-purchase agreement and other related papers/documents of the consortium to the commission," says the last condition set by the securities regulator in ordering a fresh start.

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