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Bangladesh Securities and Exchange Commission (BSEC) has rejected the rights share offer of Dragon Sweater and Spinning Ltd.
The securities regulator issued a letter to the company on June 3 in this regard, according to an official disclosure on Tuesday.
The letter said that the Commission is not in a position to consider the company's plea for issuance of rights shares as no revised documents have been submitted.
In the letter, the commission said, after applying the rights offer based on the financial statements for the period ended March 31, 2018, the company has declared 20 per cent stock dividend for the year ended June 30, 2018 as well as 10 per cent stock dividend for the year ended June 30, 2019.
As such, due to declaration of said dividend the size of paid up capital of the company has increased, but, no decision has been taken/approved by the shareholders regarding rights shares against those two years' stock dividend as well as nothing has been submitted to the BSEC regarding above issues, said the disclosure.
Each share of the company closed at Tk 9.50 on Tuesday, remaining unchanged over the previous day.
Its share traded between Tk 8.0 and Tk 21.30 in the last one year.
In May, 2018, the board of directors of Dragon Sweater decided to issue rights shares for mobilising more than Tk 881 million to expand the company's existing capacity.
The company offered two rights shares for existing three shares at Tk 10 each.
The rights issue is an offer of new shares by a company to its existing shareholders in proportion to the shares they already hold, and usually at a discount than the market price.