SEC sets uniform share face value at Tk 10 ==>> Listed firms, MFs told to do conversion by Nov 30

Express (August 24, 2011)

The securities regulator Tuesday ordered all listed companies and mutual funds to convert the face-value of their shares and units into Tk 10 each by November 30 this year, an official said.

The Securities and Exchange Commission (SEC) took the decision at its board meeting headed by its chairman M Khairul Hossain, setting the stage for trading of all shares at a uniform price from December 1 this year.

SEC Executive director M Saifur Rahman said the move aimed at ending confusion on share prices, stopping listed firms to manipulate the market with frequent changes in the face-value and safeguarding investors' interest.

"If listed companies and mutual funds fail to convert their share and unit face-value into Tk10 each by November 30, their trading will be suspended from December 1 without any prior notice," said Rahman.

He said the decision follows recommendations by the December-January share scam probe committee, which has accused some companies of spooking the market with unnecessary changes in the face-value of their shares.

The committee led by Khondaker Ibrahim Khaled advised the regulator to convert the face-value of all shares into a uniform price so as to preempt any attempt by companies to cash in on any share splitting decision.

As per regulatory decision, 137 listed companies and mutual funds, including the private AIMs First, will have to convert their face value to Tk 10 each before the SEC deadline.

Presently, the face-value of 124 companies and 12 mutual funds is Tk 100 each. The face-value of three corporate bonds is Tk 1000 and one mutual fund, AIMS First, is face-valued at taka one each.

The SEC decision won't affect 123 listed companies and mutual funds whose face-value has already been converted to Tk 10.

Mr. Rahman said the regulator has reached a "unanimous decision" on converting the face-value of all stocks. "A circular to this effect will be issued very soon," he said.

"The regulator is hopeful that all controversies on share splitting will be eliminated through the latest decision," the SEC spokesman added.

Former SEC Chairman AB Azizul Islam welcomed the regulator's new move, saying it will help stabilise the volatile stock market.

"We have seen how share splitting decision by some companies swindled investors during the heyday of the market last year," Mr Islam, also a former finance advisor of the last caretaker government, said.

"Since all the companies now have to convert their shares before the SEC-set deadline, there will be no scope for influencing their share prices," Mr. Islam told the FE.