BSEC directs 65 companies to increase paid-up capital

The Bangladesh Securities and Exchange Commission (BSEC) has directed 65 companies, which have paid-up capital below the Tk 30-crore mandatory limit on both the stock exchanges, to catch up the amount.

According to the listing regulations of Dhaka and Chittagong stock exchanges, the paid up capital of listed companies in the main market is at least Tk 30 crore.

The companies with paid-up capital above Tk 20 crore have been given time until June 30, 2022 and the firms with below Tk 20 crore have been given time until December 31 of the same year.

The stock market regulator on Sunday sent a letter, issued on December 9, to the managing directors of 65 companies to this end.

At the same time, the managing directors of Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE) and Central Depository Bangladesh Limited (CDBL) have been informed about the order.

According to market data, there are 11 companies with paid-up capital above Tk 20 crore and there are 54 companies with paid up capital below Tk 20 crore.

According to BSEC’s letter, as per Regulation 9 (i) of Dhaka and Chittagong Stock Exchange (Listing) Regulation 2015, the paid-up capital of all companies listed in the main market is at least Tk 30 crore. Accordingly, the paid-up capital of the companies has to be increased, it said.

The letter further stated that a specific and detailed proposal should be submitted to the BSEC within 30 days of its issuance regarding the increase in paid-up capital.

The BSEC will co-operate in providing necessary approvals (if any) in this regard, it said.

In this regard, capital market expert Professor Abu Ahmed said the BSEC has pointed out three ways to increase the capital — bonus share issue, right share issue and repeat IPO.

“But there are many companies that have been running at losses for years. With the new order a new liability has been created for the companies,’ he said.

“It is not possible for all such companies to make bonus, right or repeat IPO,’ he argued.

However, in this case, the BSEC said those which can meet the condition, will be in the main market. The rest will be taken to the SME board, where everyone cannot transact, only institutional investors will transact there, it said.