BBS Cables, auditor, issue managers fined for breaching IPO rules
The shareholder directors of BBS Cables, the auditor and two issue managers will have to pay Tk5 lakh each in fine
The securities regulator has fined the shareholder directors and the managing director of BBS Cables, its auditor and two issue managers for violating initial public offering (IPO) rules.
The BBS Cables directors – other than the independent directors, auditor Ahmed Zaker and Co, issue managers Banco Finance and Investment Ltd and ICB Capital Management Ltd will have to pay Tk5 lakh each in fine.
The website of the company, which got listed on the stock market in 2016, shows it has five shareholder directors – including the managing director and the board chairman.
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The Bangladesh Securities and Exchange Commission (BSEC) decided the fine at a meeting on Wednesday with its Chairman Professor Shibli Rubayat-Ul-Islam in the chair.
The companies had tried to mislead the securities regulator by not declaring related party transactions properly, a BSEC press release said.
It also said the issuer company purchased machines worth Tk58.7 crore from Gomoti Traders – owned by BBS Cables director Md Ashraf Ali Khan – from 2010-2016, which is 69 percent of the company's total machine purchases.
However, the transactions with Gomoti were described in the IPO prospectus as related party transactions.
The auditor and issue managers of the company issued the audit report and due diligence certificates, keeping the matter secret, and through this they have violated the IPO rules, said the press release.
Promoters and directors now own only 32.76 percent shares of the company while the rest are in the hands of institutional, individual and foreign investors.
