B Mirror Report: The Bangladesh Securities and Exchange Commission (BSEC) has issued show-cause notices to officials of Dhaka Stock Exchange (DSE) PLC over the disputed transfer of pledged shares of Central Pharmaceuticals Limited to IDLC Investment Limited, citing alleged violations of securities regulations.

According to commission sources, a recent letter was sent directly to the DSE officials involved in the transfer, after the exchange’s earlier response to a prior show-cause notice was deemed unsatisfactory. As of now, no formal reply has been submitted.

The case concerns the transfer of 2.18 crore shares held by two sponsor-directors of Central Pharmaceuticals—Mansur Ahmed (1.51 crore shares) and Morsheda Ahmed (67 lakh shares)—to IDLC Investment. Allegations suggest that despite the combined sponsor shareholding falling below the mandatory 30% threshold, with the shares being pledged and the company classified as Z-category, the DSE approved the transfer.

BSEC maintains that the transfer violated existing securities laws and rules. For Z-category companies, such transfers require prior approval from the commission. Additionally, shares held by sponsors whose combined holding falls below 30% are non-transferable under current regulations. The company’s share price closed at Tk 9 on the Dhaka Stock Exchange yesterday.

The matter became more complex when IDLC Investment rejected an application to transfer an additional 43.92 lakh pledged shares in its favour. Market insiders say that if the initial transfer had been fully compliant, this rejection raises further regulatory concerns.

Separately, Mansur Ahmed, Managing Director of Central Pharmaceuticals, filed an application with BSEC alleging that the DSE approved the pledged share transfer in violation of rules. He cited two portfolio management agreements signed with IDLC in 2017, under which margin loan accounts were opened and shares pledged. Following the company’s downgrade to Z-category, transfer restrictions were imposed, which he claims were ignored.

“I have applied to the BSEC seeking a fair resolution. I expect a just outcome. If I do not receive a satisfactory solution, I will soon seek legal recourse in court, as I have suffered significant losses due to this incident,” Mansur told media.

A BSEC official, speaking on condition of anonymity, said Z-category shares cannot be transferred in this way. The official added that the sponsor-directors failed to maintain the mandatory 30% minimum holding, yet IDLC applied for the transfer and the DSE approved it, seemingly ignoring commission directives.

IDLC Investment’s Chief Operating Officer Abul Ahsan Ahmed, however, stated that the company followed all legal procedures and obtained court approval before applying for the transfer. The DSE, represented by Managing Director Nuzhat Anwar, said the approval was granted in line with legal procedures and the court order.

The incident has drawn close attention from market participants, raising questions about regulatory oversight and procedures for share transfers of Z-category companies. As of January 2026, sponsor-directors collectively hold 7.67% of Central Pharmaceuticals’ shares, institutional investors hold 6.94%, and the general public holds 85.39%.