The acquisition of a significant shareholding in a listed company within the Dhaka Stock Exchange (DSE) presents a complex legal landscape in Bangladesh. LawFirm.com.bd, a distinguished legal entity in the country, has extensive experience in navigating the legal process associated with such acquisitions. This article aims to provide an in-depth understanding of the regulatory guidelines governing the acquisition of substantial shareholding in listed companies with DSE and LawFirm.com.bd’s expertise in facilitating and overseeing these transactions.
By September 30, companies that do not maintain a minimum 30% shareholding of paid-up capital by sponsors and directors are required to provide the Bangladesh Securities and Exchange Commission (BSEC) with a comprehensive plan.
The regulator further stipulated in its directives for stock exchanges that companies must appoint a minimum of two additional independent directors within 15 days, pending commission approval.
Officials from the BSEC stated that sponsors and directors lose interest in the operations of a company when their shareholdings decrease. They further stated that general investors incur losses by holding shares of that company.
Approval of Listing in DSE:
(1) Except as permitted by these Regulations, no transactions involving securities shall be permitted on the trading system of the Exchange unless the securities have been listed and permission to do so has been granted.
(2) The permission specified in sub-regulation (1) may be granted by the Exchange in response to an application filed by the issuer of the securities in the manner specified in these Regulations.
(3) The listing procedures of the Exchange must be finalized no later than thirty (30) working days subsequent to the date on which the subscription list is terminated.
(4) The Exchange may waive any listing requirement or provision. However, in the event that the Exchange itself lists its securities, the Commission shall retain the authority to approve, postpone, or deny such listing.
Documents and Information Required for the Listing of Securities: The following information and documents, duly attested by the issuer’s and issue manager’s competent authorities, shall be submitted with the listing application to the Exchange:
Listing of Equity Securities in DSE Bangladesh:
For listing of equity securities, the issuer of equity securities shall submit the following documents and information:
Documents and information previously submitted to the Exchange in accordance with the public offering rules at the time of application for public offering are not required to be resubmitted hereunder:
(i) Request to be included in the prescribed list (Annexure-2 of Schedule-A);
(ii) An authenticated copy of the Memorandum & Articles of Association, (iii) A copy of the certificate of incorporation, (iv) A copy of the certificate of commencement of business, (iii) A copy of the certificate of registration for industrial units, (iii) A copy of the certificate of commencement of business, (iv) A copy of the feasibility report, if a new project, and (vi) A copy of the certificate of registration for industrial units issued by the Registrar of Joint Stock Companies and Firms.
(vii) Copies of all significant contracts and agreements that have been exchanged or entered into with any party, including apparatus suppliers and financial institutions;
(viii) Documents attesting to the importation of capital machinery or capital goods; (ix) Copies of consent letters issued by the Commission for capital raising; (x) Directorships of other companies listed on the Exchange; (xi) Commission-approved final prospectus; (xii) Auditors’ Certificate attesting to the amount subscribed by promoters/directors/subsidiaries/associates; (xiii) Documents attesting to the issuance of securities
(xiv) Copies of the underwriting agreement and the underwriters’ capital adequacy declaration
The regulations governing the acquisition of a large shareholding in listed companies listed with DSE are primarily governed by the securities laws and regulations in Bangladesh. The Securities and Exchange Commission Act, 1993, and subsequent regulations issued by the Bangladesh Securities and Exchange Commission (BSEC) play a pivotal role in overseeing such transactions.
Legal Process of Acquisition Facilitated by LawFirm.com.bd
LawFirm.com.bd has a robust track record in facilitating and overseeing the legal process involved in the acquisition of substantial shareholding in listed companies. Their legal expertise covers various stages and intricacies of such transactions, ensuring compliance with regulatory guidelines and safeguarding the interests of their clients.
Key Stages in the Legal Process:
1. Due Diligence:
- Conducting extensive due diligence is a foundational step in the acquisition process. LawFirm.com.bd ensures a comprehensive evaluation of the target company, covering its financial status, regulatory compliance, and legal standing.
2. Structuring the Acquisition:
- The legal team at LawFirm.com.bd excels in structuring the acquisition, drafting agreements, and outlining terms and conditions that cater to the interests of both parties involved.
3. Regulatory Compliance:
- Ensuring adherence to the regulatory framework set by the BSEC is crucial. LawFirm.com.bd meticulously oversees compliance with securities laws and BSEC guidelines to ensure a legally sound transaction.
4. Transaction Documentation and Approval:
- Preparation of the necessary documentation, including share purchase agreements and other legal documents, is a pivotal stage in the process. The firm navigates this stage adeptly, ensuring all documentation is comprehensive and legally binding.
5. Submission and Approval Process:
- LawFirm.com.bd assists in the submission and approval process required by the BSEC, providing legal support in facilitating and expediting the approval process.
Complexity of Acquisitions and Legal Expertise
The acquisition of substantial shareholding in listed companies involves intricate legal and financial nuances. LawFirm.com.bd’s expertise in understanding these complexities and navigating the legal landscape surrounding such acquisitions is a testament to their legal proficiency. Their ability to address legal intricacies within these transactions has been instrumental in safeguarding the interests of their clients.
Challenges and Legal Strategies
Acquiring a significant shareholding in a listed company involves challenges such as regulatory compliance, shareholder rights, and due diligence complexities. LawFirm.com.bd addresses these challenges by devising strategic legal guidance, conducting meticulous due diligence, and ensuring strict compliance with the regulatory framework to facilitate a legally secure and transparent acquisition process.
LawFirm.com.bd’s expertise in overseeing the legal process of acquiring substantial shareholding in listed companies with DSE in Bangladesh showcases their commitment to legal excellence. The firm’s profound understanding of the legal intricacies and ability to navigate the complex regulatory landscape within the securities laws of Bangladesh underscores their expertise. Their adept handling of the legal process of such acquisitions has been crucial in ensuring compliance with the law and safeguarding the interests of their clients.
In summary, LawFirm.com.bd’s experience in navigating the legal intricacies surrounding the acquisition of substantial shareholding in listed companies listed with DSE highlights their commitment to legal excellence within the securities laws and regulations in Bangladesh.