Bangladesh: BSEC warns Agrani over raising capital without approval

Dhaka, July 14, 2014 (New Age): Bangladesh Securities and Exchange Commission has warned Agrani Bank Limited, a state-owned entity, over raising capital for three years without getting the approval of the capital market regulator. The BSEC sent a warning letter to the bank in June after holding a hearing from the Agrani Bank on April 28 this year. Agrani Bank is a non-listed public limited company. BSEC warned Agrani Bank as it had increased its paid up capital to Tk 991 crore in 2012 from Tk 547 crore in 2010, a BSEC senior official said. As per the securities rules each and every company is bound to get approval from the BSEC before increasing paid up capital, he said. A BSEC letter issued to the managing director, directors and company secretary of Agrani Bank said, ‘The commission, considering the explanation (of the bank) has decided to dispose of the proceedings against Agrani Bank by placing on record the Commission’s dissatisfaction on the default/contravention made by you (Agrani Bank) with a warning to ensure compliance of all securities related laws in future.’ The letter also said that disposal does not absolve the bank from its lawful responsibilities/obligations to any person, if affected, as a result of the stated default. As per the BSEC’s finding, the paid up capital of Agrani Bank was Tk 248 crore in 2008 which increased to Tk 497 crore in 2009 as the company issued 100 per cent stock dividends for its share holders. The paid up capital of the company increased by another 10 per cent to Tk 547 crore in 2010 after the Bank declared 10 per cent dividend. The capital of the company increased to Tk 901 crore in 2011 as it had declared 10 per cent dividend for its investors. The paid up capital of Agrani Bank increased by Tk 90 crore to Tk 991 crore in 2012, the audited financial statement of the bank showed. During the hearing, Agrani Bank confessed its unwilling mistake.