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This process would help in deducing the accuracy of the information provided by companies applying for IPOs
The Bangladesh Securities and Exchange Commission (BSEC) has asked the National Board of Revenue (NBR) to nominate key personnel from the revenue regulator, who will verify the submitted income tax returns and value added tax payments of companies willing to go public.
Dhaka Tribune got hold of a letter sent last week by the BSEC to Abu Hena Md Rahmatul Muneem, NBR chairman, where it also said that if appointed, it would make the cross checking process of the interested companies easier for the stock market regulator.
This process would help in deducing the accuracy of the information provided by companies applying for initial public offerings (IPO).
Prof Shibli Rubayat-Ul-Islam, BSEC chairman, signed the letter on behalf of the BSEC.
“We sent a letter to the NBR chairman to appoint someone from their end who can help us to decode any possible discrepancies in the submitted financial documents,” said Mohammad Rezaul Karim, BSEC spokesperson.
He also said that the commission found a number of inconsistencies in the financial documents of some companies previously, who overstated profits and showed excess receivables, a violation of securities rules.
This process would help in deducing the accuracy of the information provided by companies applying for IPO, Karim also said.
Recently, the companies whose IPO proposals were rejected included Infinity Technology International, B Brothers Garments, BD Paints, Beka Garments, JMI Hospital Requisite Manufacturing, SF Textile Industries and Al-Faruque Bags.
The commission moved to amend and later expedite the IPO approval process to increase the scope of the country’s bourses, said BSEC officials.
Industry insiders say the BSEC adopted this policy of making no compromises on approving IPO approvals for not repeating mistakes made by the previous commission.
IPOs of good companies with robust financials are being approved, said a top BSEC official.
Common investors suffer when bad companies with questionable financial health enter the market. The commission will not allow anything that hurts investors, said Karim.
The BSEC is taking several initiatives to return discipline back to the stock market.
As part of those initiatives, on Monday it unveiled three valuation methods for investors to calculate the maximum price of a company’s share, under the book building method, to put an end to abnormal bidding.
(DT)
