Dhaka, Bangladesh (BBN)– Bangladesh Securities and Exchange Commission (BSEC) approved the proposal of BDT 5.0 billion subordinated bond to be issued by Eastern Bank.

The bond issue approval came at a meeting held at the BSEC head office in Bangladesh’s capital Dhaka on Tuesday evening chaired by its chairman Prof Dr. Khairul Hossain.

According to BSEC approval, the tenure of the bond will be seven years, while the characteristics will be floating rate, non-convertible, fully redeemable, unsecured and unlisted.

The securities regulator also ordered Pacific Denims authority to refund IPO fund above BDT 209.80 million, which was ‘misused’ in the name of constructing building, into the company account.

After taking required measures for refunding the IPO fund, the company’s managing director will have to submit evidence in this regard to the commission within January 31, 2019.

Earlier, the securities regulator had appointed auditor to examine the utilisation of the IPO fund raised by the Pacific Denims.

As per the auditor’s findings, the company did not repay bank loans within stipulated timeframe mentioned in the IPO prospectus.

“The company spent above BDT 5.91 million in breach of agreement letter,” the BSEC said referring auditor’s findings.

Besides, the auditor did not get cooperation from the Pacific Denims during the audit.

“A portion of IPO fund worth above BDT 209.80 million was misused and the company showed this expense in the head of building construction,” the BSEC said.

In this regard, the company provided ‘false’ information to the securities regulator.

For misusing the IPO fund, the securities regulator has also fined the company’s managing director of directors BDT 0.30 million each.

Pacific Denims raised an IPO fund worth BDT 750 million in December, 2016.

“The company also conducted illegal transactions of huge fund through repayments made in single receipt,” the BSEC found.

As per the BSEC directive, the managing director of the Pacific Denims will have to take required measures to transfer the IPO fund, which was misused, to the company account.

The managing director will also have to submit proofs in this regard to the commission within January 31, 2019.

At Tuesday’s meeting, the securities regulator has also imposed a penalty worth BDT 0.50 million on Ali Securities Company for breaching the securities rules.