The Financial Institutions Division in a letter on Tuesday asked the banks for full details on the financial appraisal of Best Holdings that led them to buy into the owning company of Le Méridien Dhaka hotel at Tk 65 per share.
The state-owned banks have invested a total of Tk 18 billion in Best Holdings.
The financial regulators also sought details of how ICB Capital Management was appointed the issue manager of Best Holdings’ controversial bid for direct listing.
The letter asked the managing directors and chief executives of Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank for a detailed timeline of the investments in Best Holdings and the minutes of the meetings of their boards of directors on approval of the investments.
These details were “extremely urgent”, Assistant Secretary Siddiqur Rahman said in the letter, mentioning the controversy reported by the media.
The mutual funds managed by Chowdhury Nafeez Sarafat’s RACE Asset Management have invested around Tk 2.5 billion in Best Holdings, according to market insiders.
Another firm owned by Nafeez, RACE Portfolio and Issue Management, was one of the issue managers of Best Holdings in its direct listing fiasco.
Government firm ICB Capital Management, the other company named as the issue manager of Best Holdings, says it knows nothing about the direct listing attempts of Best Holdings.
Nafeez, also chairman of Padma Bank, is a major player in the capital and money markets. He has invested in media outlets recently, becoming the president of the board of editors of an online news publisher. He is also the chairman of the board of trustees of Canadian University of Bangladesh.
Padma Bank Chairman Chowdhury Nafeez Sarafat is also the chairman of the board of trustees of Canadian University of Bangladesh.
The controversial plan by Best Holdings to raise Tk 2.83 billion from the capital market has been under intense scrutiny since Bangladesh Securities and Exchange Commission in a letter on Dec 15 blocked Dhaka Stock Exchange’s attempt to list it.
The office of Finance Minister AHM Mustafa Kamal also suspended a letter recommending changes to the requirements for infrastructure development companies’ direct listing plans after the media reported the content of the letter and SEC’s subsequent move.
Under the existing legal framework, the direct listing privilege is afforded only to state-owned companies.
But Best Holdings, which is also in the agriculture and construction business, applied to the DSE on Nov 12 for “special permission” for direct listing to take advantage of the finance minister’s recommendation and the fact that it has investments from the state-owned banks.
Several people related to the market described Best Holdings’ bid for direct listing as an “unprecedented big fraud”. They say an “influential quarter” tried to embezzle a huge amount of money through the direct listing.
A former DSE director said a man, who “projects himself as an influential person”, is behind the company’s controversial bid for direct listing, backed by a DSE director.