The Bangladesh Securities and Exchange Commission (BSEC), the regulator of the capital market, will look into the reasons for the continued losses of the state-owned Investment Corporation of Bangladesh (ICB) over the past few years. At the same time, the BSEC will determine the way out of the ongoing losses of the ICB.
The Financial Institutions Division of the Ministry of Finance directed the capital market regulator BSEC to investigate the cause of the ICB’s continued losses. According to reliable sources, the directive was issued with the approval of Finance Minister AHM Mustafa Kamal.
It is learned that the government set up ICB to help the capital market. ICB has developed into a prosperous financial institution by gaining the confidence of investors in its own skills. However, in the last few financial years (2018-19 and 2019-2020), the ICB is facing losses and is losing capital.
The Financial Institutions Division of the Ministry of Finance feels that the financial sector, which is not affiliated with the capital market, has faced a major crisis due to its inability to repay loans on time in industrial, commercial or non-bank financial institutions. The situation could not be changed much even with the provision of funds from the government at different times. Therefore, in this situation, the BFID considered it is necessary to review whether it would be appropriate to refinance the ICB.
According to BSEC sources, the BSEC will report to the Financial Institutions Department on the overall activities of the ICB, actual, current role in the capital market, condition of financial and non-financial assets, governance, organizational and non-financial structures and above all subject to monitoring and evaluation.
Meanwhile, according to the latest data published on the Dhaka Stock Exchange (DSE), in the first half of the fiscal year 2019-20 (July-September), ICB’s combined loss per share was Tk 1.98, compared to the company’s earnings per share (EPS) of 58 paise in the same period last year. In the second quarter (October-December), ICB’s consolidated loss per share was 21 paisa, compared to 20 paisa for the same period last fiscal.
In the three quarters of the current financial year, i.e. 9, ICB’s combined loss per share was 72 paisa, compared to a combined profit of 90 paisa in the same period of the previous financial year. And in 2018-19 financial year, ICB’s EPS was 8 paise, in 2017-18 financial year, EPS was Tk 8. 26 paisa, in 2016-17 financial year, EPS was Tk 7.29 .
When Asked, ICB Managing Director (MD) Abul Hossain said, “ICB has given 10 percent bonus dividend to the shareholders in terms of making profit in the financial year 2018-19.” And it is not yet possible to say what the financial situation will be for the 2019-20 financial year. However, the current state of the organization will be called unrealized capital erosion. “I will not call it a loss. Because if the capital market is good, the ICB may not have unrealized capital erosion further.”
Asked about this, Rezaul Karim, Executive Director (Current Responsibilities) and Newly Acting Spokesperson of BSEC, said that BSEC will continue to search for losses under the direction of the Finance Ministry. Since this instruction has come from a high level in the government, nothing more can be said at the moment.
