SEC okays Summit Power's right offers
Thursday, 31 January 2008

Staff Correspondent

The Securities and Exchange Commission on Tuesday approved the right offers application of Summit Power, paving the company's way to issue 68.64 lakh right shares.

'We have approved the company's right offers as it is found that the company board does not have any loan defaulter now,' said Farhad Ahmed, executive director of the SEC.

He said the SEC gave consent to the Summit Power for issuance of 68.64 lakh right shares at the issue price of Tk 145 per share (including a premium of Tk 45 each), amounting to Tk 99.53 crore.

The company will issue the right shares at the ratio of 4:5 (four right shares for every five existing shares). Earlier on January 2, the SEC rejected the right offers appeal of Summit Power as the commission found that a director of the company was defaulted on repayment of bank loan.

However, on January 3, the loan defaulter director of the company resigned from the company's board over the issue.

As per rules, the issuer or any of the directors of issuer must not be a bank defaulter for issuing right offers. The SEC on Tuesday also approved the deed of trustee of the Prime Finance and Investment Ltd. 'Upon the approval, the company now can sponsor a mutual fund,' said the SEC official.

He said the company applied for sponsoring a Tk 20 crore mutual fund. The SEC also decided in principle to make mandatory an initial public offer application for each of the merchant banks within a year.

'Merchant banks having issue management licenses must have to submit one IPO application within a year,' said the SEC official. He, however, said the commission would have to amend rules to implement the decision.

The commission decided to amend the rules to drag merchant banks into action to propel the growth of country's capital market as most of the registered merchant banks either remained inactive or less active, he added. There are 30 merchant banks registered with the SEC.

Of them, 24 are registered as full-fledged merchant banks, which are allowed to perform as issue manger, underwriter and portfolio manger for clients.

Five merchant banks can only work as issue manager while the rest one is to manage portfolio for clients.

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