DHAKA, Aug 26: Market prices of most of the shares of the companies, which were listed with the country’s bourses between 1993 and 2003, are now well below their face values.

During the period of 10 years, some 127 securities have been listed with the capital market, of which market prices of 71 shares are now far below their own face value. Share prices of the different companies of the large industrial groups like Beximco are also well below their face value.

A report, prepared recently by the Dhaka Stock Exchange (DSE), made the observations. According the DSE report, the worst scenario is reflected in the shares that have been listed in the bourse in 1997. Only two of the 18 listed companies’ share prices are now above their face value. Share prices of the five of the total seven companies that were listed in 1998 are below the face value. However, of the 18 shares listed with the market in 1996, the year of country’s largest share scam, a total of only nine companies’ share prices are below the face value.

Market analysts are of the view that the market regulatory body is primarily responsible for such market price situation. “These companies are listed with the market through initial public offerings (IPOs) that have to be carefully examined by the Securities and Exchange Commission (SEC),” said a market analyst. But it is now evident that the SEC did not fulfil its duty properly.

A senior official of the SEC, however, ruled out such allegations against the market watchdog. “It is not the SEC’s sole responsibility to maintain the discipline in the market,” he said. “All the companies, broker dealers and stock exchanges have also some responsibility to follow the market norms and regulations.”

He also said that SEC has taken several steps against dividend defaulters but the companies went to the court to get stay orders. “In fact, they are using the loopholes of the law to keep the whole matter hanging for an indefinite period of time,” he said disappointedly.

However, a recent internal investigation of the SEC has identified that there were “gross anomalies” when at least five companies, currently listed with capital market, raised capital through IPOs during 1996. And the anomalies happened because of the then concerned officials of the Securities and Exchange Commission (SEC) failed to scrutinise them properly, the investigation report stated.

For instance, the SEC investigation found that no tax information for BD Luggage was asked from the National Board of Revenue on the plea that the company was a “Greenfield” one. The committee opined that there was “violation of guideline for issuing the share of the Greenfield Company”.

Also in 1996, Mark BD Ltd floated IPO with prior approval from the SEC and collected more than Tk 390 million from the market. However, a technical evaluation by an expert committee found that the firm’s real asset value was only Tk 53.5 million against Tk 474.1 million shown by the company in its prospectus.