A new controversy has emerged regarding the rights share issue of the stock market-listed National Tea Company (NTC). The company’s independent director, Mamun Rashid, has shown interest in purchasing 250,000 unsold rights shares, which has caused frustration among general shareholders and sparked various questions in the market.

Following the announcement on Thursday (August 28), investors have stated that the record date policy is explicit in determining eligibility for rights shares. Only those whose names appear on that date qualify for this benefit.

A shareholder informed Share News that the price of NTC’s shares on the DSE was Tk 195 on that day. He claimed that if Mamun Rashid acquires these rights shares, he could realize an immediate profit of approximately Tk 75 per share, amounting to around Tk 18.9 million. However, he is not eligible according to the record date.

In response to the controversy, economist and former banker Mamun Rashid told the media that although the initiative to issue rights shares was initiated in 2022, the process was not finalized due to a lack of applications from investors. He stated, “Despite numerous efforts, the subscription could not be completed. Therefore, after discussions with BSEC and other stakeholders, some of our directors have expressed interest in purchasing unsold shares. I have merely expressed interest; I will not proceed with the purchase unless I receive approval.”

Bangladesh Securities and Exchange Commission (BSEC) spokesperson Abul Kalam remarked, “Rights shares can only be purchased by shareholders listed on the record date. However, if any director relinquishes their rights, others may acquire them—provided that the proposal is clearly stated. The situation regarding NTC will be investigated.”

On the other hand, NTC Company Secretary AK Azad Chowdhury took a different stance. He mentioned that shareholders had approved in the special general meeting (EGM) that directors could purchase unsold rights shares. The record date provision is applicable only to ordinary shareholders, not to directors.

NTC Bank planned to repay loans, provide working capital, and develop tea gardens and factories through rights shares. But in October 2023, BSEC directed that this money cannot be used until the government’s 51 percent share is confirmed. It is alleged that the company has already used Tk 29 crore to repay loans, ignoring that directive.

In 2022, BSEC directed that the paid-up capital of all listed companies should be at least Tk 30 crore. To meet this condition, NTC took the initiative to issue rights shares. The process was not completed despite several extensions. The latest, on August 13, when the fourth round of applications ended, several lakh shares remained unsold.

In April last year, BSEC approved the issue of 23.4 million rights shares to NTC at a price of Tk 119.53 (including a premium of Tk 109.53). This included shares allocated to the government, ICB, General Insurance Corporation, sponsor-directors and general shareholders.