A leading group has been taking different steps to draw huge amount of money from public using IFIC Bank in the name of right share or bond keeping the bank’s small investors interest at bay.
Although the small investors are majority shareholder of IFIC Bank they have no representatives to speak about their interest into the board, share holders argued.
In May 2019, the bank’s board of directors decided to issue a right share for every existing share at an offer price of Tk 10 each, to raise paid-up capital and meet future capital requirement. Later in August that year, they revised the ratio to issue one rights share for the existing four shares instead. On July 30 last year, the company revised the plan for the third time, reducing the ratio of right shares to every five shares.
But the BSEC had cancelled the bank’s right offer proposal due to its inability to appoint an underwriter. Later the board of directors of IFIC Bank has given its nod to issuing a bond worth Tk 500 crore to strengthen its capital base. “We have been smelling rat behind the diehard efforts the bank board have been initiating, Amirul Islam, a small investor told Business Mirror Thursday.
However, the issuance of the Tier-2 capital — expected to help the bank fulfil its Basel-III requirement — will be subject to approval from the Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC), said a disclosure yesterday.
IFIC Share holders said the Bexmico Group and its sister concerns are contemplating to get money from IFIC bank by taking the money from public or government in the name of right issue or bond.
“The bank is entirely run by owners of Beximco Group. Due to their Influence the company is trying to get money from IFIC Bank at anyway,” Mr. Islam added.
Sources said, small investors are leading the ownership of country’s leading first generation bank IFIC Bank as they hold about 40 percent share of the bank and the government is the second largest shareholder owning its 33 percent share.
Among the remaining shares 23.15 per cent areowning different institutions and only 4.11 per cent share are holding by its main sponsor directors Salman F Rahman and his son Ahmed Shayan F Rahman. Their mother company Beximco and sister concern New Dhaka Industries also own some share in the name of institution.
IFIC Bank Limited topped the Dhaka Stock Exchange (DSE) looser in the last week as its share price fell by 15.96 percent. The turnover of the company at the time of discussion was 29 crore 53 lakh 19 thousand taka at the end of the week which stood at a daily average of 7 crore 36 lakh 29 thousand 650 taka.
The bank’s shares closed at Tk 12.3 yesterday, down 0.8 per cent from the previous day’s trading session. IFIC Bank was listed on the Dhaka Stock Exchange in 1986. Its shares traded between Tk 7.8 and Tk 17.9 in the last one year. The bank recommended a 10 percent stock dividend to its shareholders for the 2019 financial year. However, the final approval of the dividends will come during an annual general meeting slated for August 27.
According to the DSE, IFIC Bank reported consolidated earnings per share (EPS) of Tk1.92 in the 2019 financial year, which was 71 percent higher than the previous year. Meanwhile, in the first half of this year, it posted a consolidated EPS of Tk0.59, which was 42 percent lower than that at the same period of the previous year.
The IFIC was set up in 1976 as a joint venture financer between the government and private sector entrepreneurs, with an objective to work as a finance company within the country and set up joint venture banks and financial institutions abroad.
In 1983, when the government allowed banks in the private sector, the IFIC was converted into a full-fledged commercial bank. The government now holds 32.75 percent of the IFIC Bank shares.