The securities regulator has imposed an aggregate penalty of Tk 1.1 million on the top brass of Sikder Insurance Company over mismatches in the utilisation of IPO (initial public offering) proceeds.
Of those penalised, nine are the company’s directors, while the remaining two are the managing director and the company secretary, according to an order issued by the Bangladesh Securities and Exchange Commission (BSEC) last week.
They will have to pay the penalty in their own capacity within 30 days of the issuance of the order on September 16.
Those who have been fined are the company’s directors — Nasim Sikder, Mamtazul Haque Sikder, Lisa Fatema Haque Sikder, Mohtasim Billah Khan, Monica Sikder Khan, Jonas Sikder Khan, Salah Uddin Khan, Jeffrey Khan Sikder and Mandy Khan Sikder — Managing Director Sk Abdur Rafique, and Company Secretary Abdur Razzak.
Sikder Insurance Company raised Tk 160 million under the fixed-price method in 2023.
As per the IPO prospectus, the company was supposed to invest Tk 40 million in FDRs (fixed deposit receipts), Tk 48 million in the capital market and Tk 60.81 million in purchasing a building floor, while spending Tk 11.12 million on floating the IPO.
However, the company invested Tk 42 million in FDRs with nine banks, including AB Bank, Al-Arafah Islami Bank, and Dhaka Bank. This means the company invested Tk 2.0 million beyond the investment limit set in the IPO prospectus.
The company said the excess investment made in FDRs came from the funds set aside for IPO expenses.
The securities regulator said the IPO proceeds shall not be used for any purpose other than those specified in the prospectus, without valid grounds.
Any deviation should be backed by prior approval of at least 51 per cent of public shareholders, other than the sponsor-directors, the securities regulator said in its order.
It also said the company’s excess investment in FDRs had not only breached the condition set in the prospectus, but had also violated the Securities and Exchange Ordinance.
The securities regulator also found mismatches in the investments
made by Sikder Insurance Company in the capital market.
https://thefinancialexpress.com.bd/bangladesh/regulator-penalises-sikder-insurance-directors-over-ipo-fund-misuse
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