The Bangladesh Securities and Exchange Commission has declined to approve Hami Industries PLC鈥檚 proposal to issue 50,00,000 ordinary shares at an issue price of Tk聽10 each, citing rule violations by the company鈥檚 managing director, ASM Hasib Hasan.
Hami Industries, formerly known as Imam Button Industries, changed its name in March.
BSEC executive director Rezaul Karim said that the commission rejected the ordinary share issuance request by Hami Industries.
鈥榃e have sent the letter to our enforcement department for further actions through due processes,鈥� he said.
According to a Dhaka Stock Exchange鈥檚 post on its web site on Thursday, in a letter to the company dated November 26, the BSEC stated that the decision was taken following the discovery of multiple violations of the Securities and Exchange Ordinance, 1969.
The violations conducted by ASM Hasib Hasan include creating false and misleading appearance of share money deposit, in breach of Section 18 of the Ordinance, and submitting fake and fabricated documents to support the utilisation of share money deposits, also in violation of Section 18 of the Ordinance, the DSE web site post said.
Section 18 of the BSEC Ordinance, 1969, states, 鈥楴o person shall, in any document, paper, accounts, information or explanation which he is, by or under this Ordinance, required to furnish, or in any application made under this Ordinance, make any statement or give any information which he knows or has reasonable cause to believe to be false or incorrect in any material particular.鈥�
As a result, the commission is 鈥榥ot in a position to accord consent鈥� for the issuance of the proposed shares, the web site said.
Share money deposit refers to the funds received by a company from investors or prospective shareholders as an advance payment for the issuance of shares.
The amount is recorded in the company鈥檚 accounts under a temporary liability or equity account until the shares are formally allotted to the investors.