The trustee of the DBH 1st Mutual Fund has moved to call a meeting of the unit-holders, three-fourth of whom expressed opinion in favour of converting the fund into open-end from closed-end form.
Bangladesh General Insurance Company (BGIC), trustee of the DBH 1st Mutual Fund, took the decision on Sunday after receiving a guideline from the Bangladesh Securities and Exchange Commission (BSEC).
In its guideline, the securities regulator has asked the BGIC to act as per the sections 24 (10) and 50(c) of the Securities and Exchange Commission (Mutual Fund) Rules, 2001.
One of these two sections has the provision of converting a closed-end mutual fund into open-end one based on the decision taken by three-fourth unit-holders present at an extra-ordinary general meeting (EGM).
On completion of 10-year term, the tenure of the DBH 1st Mutual Fund was extended at the end of September last for another term of 10 years by LR Global Bangladesh, the fund manager.
Then the unit holders having majority stakes (78.42 per cent) at DBH 1st Mutual Fund baulked at the decision of the fund manager and wrote to the trustee for conversion of the fund.
Under such as a situation, the BGIC wrote the BSEC seeking its guideline to solve the problem.
In its guideline, the BSEC asked the trustee to act as per the section 24 (10) and 50 (c) of the Securities and Exchange Commission (Mutual Fund) Rules, 2001.
The section 50 (c) says, a closed-end mutual fund can be converted into open-end one subject to approval of the commission, if three-fourth of the unit-holders present at extra-ordinary meeting take decision in favour of conversion.
As per section 24 (10), the trustee will call unit-holders' meeting if the commission delivers instruction in this regard for the interest of the unit-holders, or three-fourth unit-holders of a scheme or all schemes summon for holding a meeting.
Asked, Ahmed Saifuddin Chowdhury, managing director of the BGIC, said they would send a letter to LR Global so that it takes consent of its board for holding unit-holders' meeting.
"We will send the letter setting a timeframe of five to seven days. The trustee itself will call unit-holders' meeting if the fund manager does not reply to our letter," said Saifuddin.
The price of the units of the DBH 1st Mutual Fund closed at Tk 8.50 each on Sunday with a rise of 1.19 per cent or Tk 0.1 on the Dhaka Stock Exchange (DSE).
On the close of operation on October 10, 2019, the fund has reported Net Asset Value (NAV) of Tk. 9.90 per unit on the basis of current market price and Tk. 10.11 per unit on the basis of cost price against face value of Tk. 10.00.
Total Net Assets of the Fund stood at above Tk 1.18 billion on the basis of market price and above Tk 1.21 billion on the basis of cost price after considering all assets and liabilities of the fund, according to a disclosure of the fund.
