DSE asked to explain flawed filing of Alhaj Textile disclosure

The securities regulator has asked the Dhaka Stock Exchange (DSE) to explain its role in disseminating a 22 June disclosure by Alhaj Textile Mills about its appointment of independent directors and board chairman, which was later found to have been full of flaws.

The premier bourse would have to explain by the next working day, if it checked the authenticity of the content given by the textile company before disseminating it in public domain, alongside replying if it had collected relevant documents from the company or made any query or not, said the Bangladesh Securities and Exchange Commission (BSEC).

Also, if the company's announcement of appointing independent director and chairman was in compliance with the securities law or not must be explained, it added in a letter to DSE managing director on Monday.

On 22 June, Alhaj Textile informed shareholders through the DSE server news update that it appointed three professional individuals as its new independent directors and one of them was made chairman.

Later, the DSE learned that the company was in a legal battle with the BSEC as it filed a writ petition against the BSEC decision of 5 June to appoint four independent directors. The company secured a stay order initially, and later the stay order was vacated by the chamber judge at the appellate division.

BSEC officials told TBS, appointment of independent directors needed the regulator's prior approval and the company did not do it, while there had been several litigations over the control of the company's board.

In such a context, sensitive information like director appointment should have not been disseminated without verification of its merit.

DSE Acting Managing Director M Shaifur Rahman Mazumdar told TBS corporate disclosures were subject to quick discrimination and the good faith was that a listed company would not publish anything without merit.

However, as soon as the undisclosed events justifying the lack of merit came into notice through a TBS report, the DSE updated its news server on Monday and called for disregarding the previous one. 

Also, the DSE sought explanation and supporting documents in this regard from Alhaj Textile.