Seven cos get nod to raise paid-up capital
SEC sets conditions on pvt placement

FE Report

Securities and Exchange Commission (SEC) has given go-ahead to seven companies to raise their paid-up capital under private placement in accordance with some conditions set by the regulator.

The SEC said this after taking a decision in this regard in its commission meeting.

The companies which will be able to raise paid-up capital include GMG Airlines, Unique Hotels Limited (Hotel Westin), Energy Prima Limited, LankaBangla Securities, IIDFC and SN Securities Limited.

According to SEC conditions, from now on a company, set to raise its paid-up capital, will have to complete the function of private placement within 30 days which will not be extended.

The company will hand over the list of shareholders except its existing ones to the SEC within next seven days.

At the same time, the company will inform the SEC about its timeframe to go public.

SEC Chairman Zia-ul Haq Khandakar said the regulator took this decision to lessen the abuse which occurs during the distribution of private placement.

"We heard about some abuse occurred in giving private placement of one or two companies. To stop such kind of irregularities the commission has reached a decision to fix some conditions for the companies which will raise their paid-up capital before going public," he said.

Meanwhile, the SEC published advertisement seeking public opinion to use the over-the-counter (OTC) market for capital raising.

According to capital raising rule 2001, a company must apply to the SEC for raising its capital. After scrutinising the relevant papers, the commission gives permission to raise capital within 60 days.