Muhith still not convinced of Chinese consortium’s bid

Finance Minister AMA Muhith has again expressed his subtle opposition to the Dhaka Stock Exchange (DSE)'s stance on the Chinese consortium's offer to become its strategic partner.

"It happens that finally negotiations between DSE and strategic-partner consortium did not fail. Well, let us await DSE's response to BSEC," the minister wrote on a memo forwarded to him by the stock-market regulator, officials said.

The BSEC (Bangladesh Securities and Exchange Commission) forwarded a copy of the clarification it had sought from the DSE regarding Chinese consortium's proposals in the bidding.

Earlier in another note, the finance minister had aired doubt about the Chinese consortium's competence, saying: "I am sceptical about Chinese capability".

However, the DSE had made available its response to the BSEC's queries on March 04 last before the minister wrote his comment on the regulator's memo.

When the DSE requested expression of interest (EoI) last September in search of strategic investor to sell out 25 per cent of its shares, two separate groups-one led by China and another by India -- staked their claim on the market share.

The Chinese consortium comprises Shenzhen Stock Exchange (SZSE) and Shanghai Stock Exchange (SSE) while the Indian consortium comprises the National Stock Exchange (NSE) of India, Nasdaq, an American stock exchange, and Frontier Bangladesh.

After scrutinising the proposals, the DSE Board approved the Chinese bid and forwarded the selection to the regulator for its consent for hiring the highest bidder as strategic investor.

Later, an appraisal body of BSEC sought clarification from the DSE on a good number of issues mentioned in the Chinese consortium's proposals. Last Sunday, the DSE officials sent clarifications on the sticking points to the securities regulator with consent from the bidder.

According to officials, the Chinese consortium agreed to exclude and relax their conditions as questioned by the BSEC.

Meantime, the BSEC extended timeframe by one week for the appraisal body to submit report on the Chinese consortium's proposal. It was supposed to be submitted by March 7.

The regulator on Thursday also extended the deadline by three months for signing share-sale agreement (SSA) between Dhaka Stock Exchange (DSE) and its possible strategic partner since the timeframe expired on the day.

DSE has more than 1.80 billion shares with a paid-up capital of Tk 18.03 billion, and, according to the demutualisation scheme of the stock exchange, it will sell out 25 per cent or more than 450 million shares to a strategic partner.

The Chinese consortium offered Tk 22 for each of the DSE shares on sale, outbidding the contestant. It also held out a sum of US$37 million in technical assistance for development of the capital market.

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