BSEC lifts embargo on pre-IPO shares of Associated Oxygen

The market regulator has lifted an embargo on the pre-IPO shares of Associated Oxygen Ltd except for its four BO accounts.

The Bangladesh Securities and Exchange Commission (BSEC) has directed the Central Depository Bangladesh Limited (CDBL) to make the pre-IPO shares of the company lock-free, known as placement shares which are issued before listing.

The commission issued letters to its related concerns in this regard last week.

The four beneficiary owner (BO) accounts – Hasan Yousuf Chowdhury, Universal Equity Management, Bengal Assets Holdings, and NRB Equity Management Ltd – together hold 98 lakh shares of the company.

A top official of the BSEC, seeking not to be identified, said the commission blocked the pre-IPO shares after getting allegations of irregularities against the company.

The BSEC observed that the problem has been created among the four BO accounts, but all pre-IPO shareholders suffer.

For the interest of other investors, the commission decided to make the company's shares lock-free, he added.

Earlier in March this year, the regulator blocked its pre-IPO shares after finding irregularities.

Associated Oxygen, which produces and supplies gas products for the last three decades, raised Tk15 crore from the capital market to expand its business in 2020.

At the time, the company issued 5.08 crore pre-IPO shares that were 63% of its paid-up capital.

According to BSEC officials, an investor claimed to have bought 20 lakh placement shares from the Associated Oxygen, but the company did not mention the allotment in its final prospectus of the initial public offering (IPO).

Then the market regulator asked the company and its issue manager to explain the anomalies but their explanations could not satisfy the commission.

The regulator went further to resolve the matter. It called the company authorities and the complainant to the commission office to find a way out through discussions but the company did not respond.

As per the prospectus, the company could produce 8.27 lakh cubic metres of oxygen and nitrogen gas per month and 99.29 lakh cubic metres of dissolved acetylene gas per annum at its factory in Sitakunda Upazila of Chattogram.

From the July-March period of FY22, the revenue of the company was Tk41.33 crore, compared to Tk42 crore a year ago.

Its net profit stood at Tk14.67 crore, down from Tk15.37 crore in 2020.

Its earnings per share were Tk1.34 and its net asset value per share was Tk18.10 as of December 2021.

The company was incorporated in 1990 and started commercial operation in 1992.

The last trading share price at the Dhaka Stock Exchange was Tk41.20 per share on Sunday.

As of 30 April, sponsors and directors jointly held 30.65%, institutions 23.21%, foreign investors 0.15%, and general investors 45.99% of the company shares.