Recommend only good companies for IPO

The Bangladesh Securities and Exchange Commission (BSEC) yesterday ordered issue managers to thoroughly check a company's financial report before giving it a go-ahead to go public.

The order came during a seminar styled "Role of issue managers for IPO application", held at the BSEC headquarters with the top officials of almost all merchant banks in attendance.

"To get a strong stock market, there is no alternative to having good companies," said Shaikh Shamsuddin Ahmad, a commissioner of the BSEC.

Issue managers have a prime role in bringing good companies to the stock market.

After analysing the companies' actual situation, the issue managers should only provide due diligence certificates to the ones that aspire to be listed, he added.

BSEC spokesperson Rezaul Karim said issue managers need to be more careful when selecting companies for listing.

Merchant bankers should not depend on audit reports when issuing due diligence certificates.

"Instead, they should verify it physically by cross-checking the company's financial reports with its bank statements, bills and other documents," Karim said.

If all the documents corroborate the company's financial reports, only then should it be issued a due diligence certificate, he added.

Md Sayadur Rahman, president of the Bangladesh Merchant Bankers' Association, also spoke at the event.