The market regulator is going to block Associated Oxygen's pre-IPO shares, known as placement shares issued before listing, as it found allegations of irregularities against the company true.
The Bangladesh Securities and Exchange Commission (BSEC) made the decision this week but has not yet issued a letter in this regard, said officials at the commission.
Associated Oxygen, which produces and supplies gas products for the last three decades, raised Tk15 crore from the capital market to expand its business in 2020.
At the time, the company issued 5.08 crore pre-IPO shares that were 63% of its paid-up capital.
According to BSEC officials, an investor claimed to have bought 20 lakh placement shares from the Associated Oxygen, but the company did not mention the allotment in its final prospectus of the initial public offering (IPO).
Acting upon a complaint by Mohammad Haroon Kamal, a probe committee set up by the regulator enquired about the claim with the Registrar of Joint Stock Companies and Firms, which confirmed that the investor acquired 10 lakh shares of Associated Oxygen Ltd, they added.
Then the market regulator asked the company and its issue manager to explain the anomalies but their explanations could not satisfy the commission.
The regulator went further to resolve the matter. It called the company authorities and the complainant to the commission office to find a way out through discussions but the company did not respond.
BSEC Commissioner Shaikh Shamsuddin Ahmed said, to protect investors' interest, the commission takes every allegation into its consideration and examines it. If anomalies are found, the commission takes legal action against responsible companies.
The market regulator has found anomalies by Associated Oxygen and decided to block its all pre-IPO shares until the issue is resolved, he added.
The correspondent called the chief financial officer of the company for his comments but he did not pick up the phone.
As per the prospectus, the company had a capacity to produce 8.27 lakh cubic metres of oxygen and nitrogen gas per month and 99.29 lakh cubic metres of dissolved acetylene gas per annum at its factory in Sitakunda Upazila of Chattogram.
In the six months through December of 2021, the revenue of the company was Tk27.50 crore, compared with Tk13.47 crore a year ago.
Its net profit stood at Tk9.61 crore, up from Tk4.58 crore of 2020.
Its earnings per share were Tk0.94 and net asset value per share was Tk18.88 as of December 2021.
The company was incorporated in 1990 and started commercial operation in 1992.
The last trading share price at the Dhaka Stock Exchange was Tk44.50 per share on Tuesday.
As of 28 February, sponsors and directors jointly held 30.65%, institutions 24.10%, foreign investors 0.17%, and general investors 45.08% of the company shares.