DSE suspends shares trading of People’s Leasing

FE Online Report | Published: July 14, 2019 10:59:47 | Updated: July 15, 2019 10:29:08

The board of directors of Dhaka Stock Exchange (DSE) has suspended the trading of shares of People’s Leasing and Financial Services from Sunday.

The prime bourse has decided to suspend its share trading in accordance with Regulation 50 of the Dhaka Stock Exchange (Listing) Regulations, 2015, said an official disclosure  on Sunday.

The decision was taken at a board meeting held on Thursday last at the DSE board room, said the disclosure.

According to the DSE board decision, the non-bank financial institution’s share trading will be suspended until getting confirmation from Bangladesh Bank on liquidation of the company.

Recently, the government has directed the central bank to liquidate People’s Leasing and Financial Services (PLFS), a non-bank financial institution, due to deterioration of its financial health in the last several years.

Liquidation of PLFS means closing its operations permanently and the government will take actions to settle liabilities by selling off its assets. But the central bank as the regulator has to take approval from the High Court before liquidation.

Earlier on June 27, the finance ministry instructed the central bank to shutter the NBFI for its failure to improve its conditions, finance ministry officials said.

The ministry arrived at the decision after going through a detailed central bank report on the NBFI.

The NBFI has failed to repay the depositors’ money despite maturity of the funds, found the Bangladesh Bank report. Default loans and net losses have recently escalated as well.

If the liquidation goes through -- in line with the Financial Institutions Act, 1993 -- it will be a first in Bangladesh’s financial sector.

Each People’s Leasing share closed at Tk 3.0 on Thursday last, losing 25 per cent within a week following the liquidation news.

The company failed to pay dividend in the past four years and last paid dividends in 2014.

The company’s paid-up capital is Tk 2.85 billion, authorised capital is Tk 5.0 billion and the total number of securities is 285.44 million.

The sponsor-directors own 23.21 per cent stakes in the company, while institutions 9.50 per cent, foreign investors 0.19 per cent and the general public 67.10 per cent as of June 30, 2019, the DSE data shows.



Share if you like