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Home arrow News arrow Business News arrow Fears for immediate fallout from Grameenphone VOIP case
Fears for immediate fallout from Grameenphone VOIP case PDF Print E-mail
Tuesday, 29 January 2008

Bangladesh Telecommunication Regulatory Commission filed the case against GP's two preceding chief executives and eight incumbent and former high officials, charging them with involvement in illegal VoIP business. GP, the country's largest cell phone operator, and Malaysian mobile phone operator DiGi Telecommunications have also been accused of "conniving" with Bangladeshi internet service provider (ISP) AccessTel in the "punishable crime.

" Norwegian telecoms heavyweight Telenor owns major stakes in both GP and DiGi. Analysts said it was too early to make predictions on the feared fallout from the lawsuit, saying it solely depended on what the court and the regulator decided on the issue. Market analyst Moin Al Kashem said it would not create any impact on investors' decisions to trade in GP shares in future.

"Our investors are very flexible; as long as the price level is okay, I think there should be no problem," he told Moin, who manages Prime Securities, however, said the incident would have a long-term effect on the company. "Such a lawsuit against a company definitely will have a negative impact in the long run," he added. Moin also said if the matter perturbed the Securities and Exchange Commission, the market regulator, then they would take it seriously.

"Investors don't have any problem if the regulators are okay with it," he said. Economist Abu Ahmed said until there was a decision from the court on the issue it would have no impact on the market. "One thing is that they (GP) would be a profitable share and they would bring investors a lot of fortune. The other thing is, the investors in this market don't appear to care about anything if the price level is what they desire," he said. Ahmed cited the example of a company whose share price was on the rise. "When the [Dhaka Stock Exchange] officials went to visit the company's factory they found no sign of the plant and farming going on there. What would you say about that?" said Ahmed who teaches at Dhaka University.

Yaweer Sayeed, chief executive of AIMS of Bangladesh, said for now the lawsuit would not affect investor confidence in the company. "It's too early to comment. Let's see what the court decides; meanwhile I see no problem at the moment," he said. SEC chairman Faruq Ahmad Siddiqi told Monday that the lawsuit against GP would have no bearing on the company's going public by June. "We will take necessary steps to facilitate those willing to go public by abiding all the securities rules and regulations," he added.

Asked about the irregularities and illegal businesses, the chief of the market watchdog said that it was not their job to oversee these matters. DSE chief executive Salahuddin Ahmed said if the market regulators had no problem with the incident then there was no reason for it to have any impact. "If the SEC takes no action with regard to the litigation, that is, if they think it does not hinder the process of Grameenphone's public offering then I see no reason that it would have any impact on the market, even on the price level of the IPO when it is launched," he said

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