FE Report (November 23, 2010)
The Securities and Exchange Commission (SEC) has formed a two-member enquiry committee to investigate some unusual activities in respect of recent settlement failure of shares of Dhaka Electric Supply Company Ltd (DESCO) by LankaBangla Securities Ltd in the Dhaka Stock Exchange (DSE).
According to SEC sources, the regulatory body formed the probe body when about 500 investors and 44 brokers were affected due to the settlement failure of DESCO shares in a spot transaction on November 8 last.
An official said Lankabangla Securities failed to complete the settlement of about fifteen thousand shares of DESCO when the shares of the company were traded at more than Tk 2800 per share.
The brokers alleged that the failure occurred when DSE committed a mistake in the calculation of a cum-benefit dividend entitlement of DESCO shares to the investors.
"DSE in a letter suddenly asked us that a big portion of money to be refunded which was already credited to the respective accounts of the investors who were entitled to get the cum-benefit," a brokerage house source told the FE.
He said it was an unprecedented example in the DSE history that cum-benefit dividends are ordered to be deducted from the investors' accounts.
"Investors will never believe us in such case and they will definitely seek legal action against us," he added.
Meanwhile, DSE arranged a meeting Sunday to solve the issue where affected brokers attended.
Meeting sources said, the brokers demanded a proper rule on settlement of shares as far as cum-benefit and ex-dividend are concerned.
They also blamed the DSE management for the miscalculation of a core cum-benefit entitlement.
The newly-formed body will submit its investigation report to the SEC by December 9 this year.
The members of the SEC's investigation body are Director Ripon Kumar Debnath and Assistant Director Tania Sharmin.
The Securities and Exchange Commission (SEC) has formed a two-member enquiry committee to investigate some unusual activities in respect of recent settlement failure of shares of Dhaka Electric Supply Company Ltd (DESCO) by LankaBangla Securities Ltd in the Dhaka Stock Exchange (DSE).
According to SEC sources, the regulatory body formed the probe body when about 500 investors and 44 brokers were affected due to the settlement failure of DESCO shares in a spot transaction on November 8 last.
An official said Lankabangla Securities failed to complete the settlement of about fifteen thousand shares of DESCO when the shares of the company were traded at more than Tk 2800 per share.
The brokers alleged that the failure occurred when DSE committed a mistake in the calculation of a cum-benefit dividend entitlement of DESCO shares to the investors.
"DSE in a letter suddenly asked us that a big portion of money to be refunded which was already credited to the respective accounts of the investors who were entitled to get the cum-benefit," a brokerage house source told the FE.
He said it was an unprecedented example in the DSE history that cum-benefit dividends are ordered to be deducted from the investors' accounts.
"Investors will never believe us in such case and they will definitely seek legal action against us," he added.
Meanwhile, DSE arranged a meeting Sunday to solve the issue where affected brokers attended.
Meeting sources said, the brokers demanded a proper rule on settlement of shares as far as cum-benefit and ex-dividend are concerned.
They also blamed the DSE management for the miscalculation of a core cum-benefit entitlement.
The newly-formed body will submit its investigation report to the SEC by December 9 this year.
The members of the SEC's investigation body are Director Ripon Kumar Debnath and Assistant Director Tania Sharmin.
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