The subscription to the IPO (initial public offering) of Indo-Bangla Pharmaceuticals Limited, which was supposed to start from Sunday, will remain suspended until resolution of a stay order on the process by a court.
The High Court recently stayed the IPO process of the company for six months as four of its directors are 'loan defaulters' as the guarantors of loans disbursed by National Bank Limited (NBL).
Following the stay order, the company appealed against the order and, after the hearing held on Thursday, the Appellate Division sent the matter to regular court.
"The HC's stay order will remain valid as the Appellate Division has not stayed the HC's stay order, following the plea of the issuer company," said Advocate Mukunda Chandra Debnath, a lawyer of the NBL.
He said that it was not certain when the regular court will deliver its order on completion of hearing.
As a result, the public subscription of the Indo-Bangla Pharmaceuticals Limited will not be started from April 8, he added.
"The public subscription will remain postponed until further notice," said an executive at the office of the issue manager, informing the FE that the company had already arranged a public announcement in this regard to be published in the newspapers today (Friday).
"The company will announce the date of starting public subscription later if the regular court delivers order in favour of the issuer company," he added.
According to the NBL lawyer, the HC had stayed the IPO process of Indo-Bangla Pharmaceuticals Limited following a writ petition filed by NBL over non-payment of loans the bank earlier disbursed to Indo-Bangla Pharmaceuticals Works, the previous name of the company.
"Four directors of Indo-Bangla Pharmaceuticals Limited were the guarantors of the loans earlier disbursed to Indo-Bangla Pharmaceuticals Works. That's why the four directors of the company are also loan defaulters as guarantors," advocate Mukunda said.
He said the NBL had earlier filed a case with Barishal Artha Rin Adalat against Indo-Bangla Pharmaceuticals Works over the non-payment of a loan worth more than Tk 141.50 million.
The managing director of Indo-Bangla Pharmaceuticals Limited had no CIB (Credit Information Bureau) clearance before applying for IPO approval, the NBL's lawyer said.
"After obtaining an order of stay of the CIB report of the managing director from the HC, the company submitted IPO proposal to the securities regulator. Later, the HC vacated the stay order following another petition filed by the NBL," Mr Mukunda said.
He said the securities regulator cannot approve the IPO proposal of any company if any of its directors is loan defaulter.
Bangladesh Securities and Exchange Commission approved the IPO proposal of Indo-Bangla Pharmaceuticals Limited on October 3, 2017.
The company got the regulatory approval to raise a fund worth Tk 200 million by issuing 20 million ordinary shares at an offer price Tk 10 each under the fixed price method.
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