MD clarifies ICB’s role in Best Holdings’ direct listing plan

Investment Corporation of Bangladesh's (ICB) Managing Director Abul Hossain said the controversy over his merchant banking subsidiary – ICB Capital Management – as the issue manager to the direct listing of Best Holdings Ltd is a result of misunderstanding.

The merchant bank neither signed an issue management agreement with the company, nor denied the recent developments that might lead to the said agreement in the coming days, he told The Business Standard on Monday.

The ICB Capital Management has recently published a rejoinder against media reports which said that the Race Portfolio and Issue Management and the ICB Capital Management are jointly working as issue managers to Best Holdings Ltd in its planned direct listing.

"Last month, the ICB Capital Management offered issue management services to Best Holdings Ltd, and the company agreed on. But we are yet to sign the necessary agreement," he said, adding, "And until the agreement is made, one cannot say that we are an issue manager to the company."

"But, we will sign the agreement and work professionally," said Hossain. "If the regulation does not permit, if we find any non-compliance, we ultimately cannot serve the company."

Best Holdings Ltd, the parent company of Le Meridien Dhaka, a five star hotel, came into the centre of controversy last week when a portion of the Dhaka Stock Exchange (DSE) directors turned desperate to stealthily raise and pass an additional board meeting agenda for direct listing of Best Holdings.

Direct listing is a method of a company's entry to the bourses where the company directly offers a portion of its existing shares to the bourses instead of issuing new shares and the reference price for the new shares is fixed based on the first 30 minutes' auction instead of more sophisticated and regulated price building method seen in book building.

As the existing regulation does not permit the non-government company's direct listing, and the draft information document of the company retains six non-compliances with the existing regulations, a majority of the DSE directors and officials went against the agenda and the topic came into public discussion.

The Bangladesh Securities and Exchange Commission (BSEC), also ordered the DSE to stop the agenda and explain its behaviour to act before securities law permits the planned direct listing.

The finance ministry wrote to the BSEC last September for clearing the way to directly list private sector infrastructure projects with state-owned banks holding at least 20% of shares.

The Best Holdings' controversy made the finance ministry on Thursday write to the BSEC again not to proceed with the previous order until further notice.  

Best Holdings is a controversial company since it received investments from state-owned banks, believed to be based on inflated figures and also because of the ongoing anti-corruption and money laundering investigation against the company's managing director.

However, the latest round of letters by the BSEC and the finance ministry halted the company's direct listing plan, at least for now.