Professor Dr M Kaykobad, an independent director of the Dhaka Stock Exchange, replaced Minhaz Mannan Emon as a new member of the scrutiny team
The Dhaka Stock Exchange (DSE) on Monday removed its Shareholder Director Minhaz Mannan Emon from the recently-formed initial public offering (IPO) review team, to uphold the spirit of demutualisation of the stock exchange.
In a board meeting held at the DSE tower in Nikunja, the capital city bourse appointed its Independent Director Professor Dr M Kaykobad as a new member of the IPO review team.
Speaking to The Business Standard, Minhaz Mannan Emon said, "Stock exchange demutualisation is aimed to separate market professionals from the operational ins and outs of the exchange. To uphold the spirit of demutualisation, I decided to step down from the responsibility, since I am a shareholder director of the exchange."
He thinks that the decision has been taken to keep the future opinions by the review team above all controversies.
If a representative of stockbrokers is engaged in scrutinising IPO disclosures, aggrieved parties may raise a question about a conflict of interests.
"Except me, all the members in the review team are either independent directors or executives of the DSE. Through my replacement, the team is supposed to become more independent in nature," Emon added.
On October 28 this year, after consulting with the Bangladesh Securities and Exchange Commission (BSEC), the Dhaka Stock Exchange formed a team consisting of four of its board members and its managing director, along with its head of listing department, to scrutinise all IPO disclosures and opine in this regard to assist the market regulator.
The review team, headed by DSE Independent Director Dr Md Masudur Rahman, now contains other independent directors – Justice Siddiqur Rahman Miah, Brigadier General Md Mostafizur Rahman and the newly added Dr M Kaykobad.
Two other members of the committee are Managing Director (current charge) Abdul Matin Patwary and Head of the Listing Department Abdul Jalil. Abdul Jalil is the member secretary of the committee.
Against the backdrop of listing a number of poorly performing businesses in recent years, a demand arose for improving the entire process of listing a company with the capital market.
Individual investors have been repeatedly complaining that the securities regulator, the issue managers and even a number of auditors have failed to protect investors' interests by failing to list good businesses with the market.
There is an allegation of manipulating disclosures during many IPOs, which later supposedly caused damage to the investors' portfolio and the stock market as well.
In a meeting with the exchange professionals and stockbrokers held at the BSEC office on October 24, the commission promised that without satisfying the DSE-formed review team, no company will be allowed to be in the market in the future.
During the board meeting on Monday evening, the DSE board approved the listing proposals of Ring Shine Textile, which recently closed its IPO subscription, according to the communications and publication officials of premier bourse.
They also informed that a committee was formed last week to find out the reason behind the wrong earnings posted by the DSE market operations department. The committee has two more working days to submit their findings to the management of the exchange.