Dhaka, Bangladesh (BBN)- The Bangladesh Securities and Exchange Commission (BSEC) has imposed embargo on Argon Denims and Salvo Chemical Industry from raising capital from capital market for next three years for ‘unlawful’ expending of IPO funds, officials said.
The BSEC also fined Argon Denims and Salvo Chemical Industry BDT 3.0 million and BDT 0.5 million respectively.
The decisions were taken at a commission meeting held on Tuesday at the BSEC office in the capital Dhaka.
The stock market watchdog also imposed a penalty of BDT 5.0 million on former director of Sylhet Metro City Securities Shamim Ahmed who embezzled shares and money of his clients.
At the same time, Mr. Ahmed will never be involved with any organisation of capital market and his BO (beneficiary owner’s) account will remain freeze until further instruction.
According to BSEC findings, Argon Denims breached securities rules by spending IPO fund beyond the conditions set in the prospectus and consent letter approved by the securities regulator.
The BSEC said the company paid excess money to repay short-term loan and debt taken from One Bank and Mercantile Bank respectively.
Besides, the company re-paid the short term loan worth BDT 30 million taken from LankaBangla Finance, although the issue was not mentioned in the prospectus.
On the other hand, Argon Denims paid BDT 279.4 million for purpose of purchasing construction materials without banking channel.
In January, 2011 Salvo Chemical Industry raised a fund worth BDT 260 million from the capital market.
According to BSEC findings, the Salvo Chemical Industry showed utilisation of BDT 260 million although the company utilised BDT 240 million. The company also spent BDT 22.1 million without banking channel.
BBN/SSR/BB-15Oct14-10:55 am (BST)