The Bangladesh Securities and Exchange Commission has moved to withdraw suspension order on the controversial Appollo Ispat Complex Limited’s initial public offering of Tk 220 crore, BSEC officials said. The withdrawal of suspension order on Appollo Ispat’s IPO is on the agenda of today’s Commission meeting, a BSEC official told New Age on Wednesday.
The suspension of the IPO, scheduled to be held on March 3, was imposed in February following an intervention of finance minister AMA Muhith. The finance minister in February advised the BSEC chairman to suspend the IPO of the AICL over allegations of different irregularities.

In the letter, Muhith advised the BSEC to start immediate investigations into the interests of Appollo’s former company directors, to realise taxes from them, to get the company audited, and to probe its letters of credit to find out possible fund embezzlements. A Bangladesh Bank report regarding the AICL which was sent to the BSEC on March 31 showed that the company had Tk 437.35 crore loans with 17 bank’s 18 branches. Of them, the BB inspection team had visited Eskaton branch of Bank Asia, Dhanmondi branch of Southeast Bank, Federation branch of IFIC Bank and found several loans were classified.

The prospectus of the company also showed that it had total bank loans of Tk 437.35 crore. The AICL showed Tk 149 crore as the floor space value in the Rangs Tower which was demolished by the government in 2007. The BSEC officials also said that the company did not issue any dividend for its shareholders for the last 17 years. The company issued placement shares of Tk 107 crore in 2009 but has yet to issue dividend for the shareholders. ‘We hope that the company would be able to issue dividends for the shareholders if the BSEC withdraws the suspension on the IPO. Of the Tk 220-crore IPO fund, we will repay Tk 153 crore loans which will reduce interest burden of the company. The rest amount will be used for setting up plants which will obviously increase the productivity of the company and increase the earning,’ AICL deputy managing director Abdur Rahman told New Age.

‘The company is fighting for compensation against the floor space in the demolished Rangs Tower. If we get the compensation in future, that will be obviously beneficiary for the shareholders,’ Rahman said. The AICL first submitted its IPO application in the Commission in October 2011 with an offer price of Tk 70, including a premium of Tk 60, to offload 5.71-crore shares to investors. But the BSEC rejected it as it found a number of false information in the AICL application.

The BSEC fined the company, its auditor firm Joha Zaman Kabir Rashid and Co and the issue manager ICB Capital Management Tk 1 lakh each. The BSEC also fined the valuer company Moshi Muhith and Company Tk 2 lakh on the same ground. In October 2012, the AICL again submitted its IPO application and the Commission again found that the company did not submit some necessary documents. Later, in October 27, the AICL submitted the IPO application to the BSEC setting offer price at Tk 20. But, the company on December 3, resubmitted the IPO application increasing the offer price to Tk 22, Commission officials said.

Allowing a company to increase offer price is an unusual practice which was never done before, the BSEC officials said. On December 13, just after 10 days of submission of application, the BSEC, after getting the Credit Information Bureau report from Bangladesh Bank, approved the AICL to issue its IPO with an offer price of Tk 22 each share including a premium of Tk 12.

Source :: New Age