BSEC Begins Probe into Possible Irregularities at ADN Telecom
The Bangladesh Securities and Exchange Commission (BSEC) has formed a three-member committee to investigate alleged irregularities at ADN Telecom Limited, a listed company under the Information and Communication Technology sector of the capital market. The members of the committee are Md. Mustafizur Rahman, Deputy Director at BSEC; Niloy Karmakar, Assistant Director at BSEC; and Utpal Chandra Debnath, Deputy Manager at the Dhaka Stock Exchange (DSE). The committee has been tasked with submitting a report within 60 days regarding the utilization of funds raised through the Initial Public Offering (IPO) and the company’s investments in land development at a Hi-Tech Park.
According to its audited financial report for the fiscal year ending June 30, 2024, ADN Telecom’s board of directors declared a 10 percent cash dividend for shareholders. The company reported earnings per share (EPS) of BDT 2.31 for the same period, a significant rise from BDT 0.04 in the previous year. As of June 30, 2024, the net asset value per share (NAVPS) stood at BDT 31.35.
Sources at the BSEC confirmed that the managing director of ADN Telecom has been officially notified about the investigation through a formal order. The order stated, “The Bangladesh Securities and Exchange Commission considers it necessary to investigate the utilization of IPO funds and the investment in land development at the Hi-Tech Park by ADN Telecom Limited, in the greater interest of the capital market and general investors.” The investigation is being conducted under the authority granted by Section 21 of the Securities and Exchange Ordinance, 1969 (Ordinance No. XVII of 1969).
The committee will examine whether ADN Telecom has utilized the IPO funds properly as outlined in its prospectus. It will also verify whether the company has made appropriate investments, including leasing land at various hi-tech parks.
Historically, companies accused of violating market rules during previous governments have often avoided strict regulatory actions. However, under the leadership of Khondker Rashed Maksud, the reconstituted BSEC has taken a tougher stance, particularly against brokerage firms with shortfalls in consolidated customer accounts.
It is reported that ADN Telecom raised BDT 570 million through the capital market. As part of the IPO process, the company sold 11,875,000 shares to eligible institutional investors at BDT 30 each through the book-building method, raising BDT 356.25 million. It also raised BDT 213.75 million by selling 7,916,666 shares to general investors at BDT 27 per share. The proceeds were allocated to infrastructure development, data center establishment, debt repayment, and IPO-related expenses.
In 2024, the company announced plans to expand its operations by establishing a new facility in Sylhet. As part of this expansion, ADN Telecom received an allotment of approximately 1.75 acres (7,095 square meters) of land at the Bangabandhu Sheikh Mujib Hi-Tech Park (BSMHTP) in Sylhet. The lease agreement for the land was finalized on April 16, 2024, under the Information and Communication Technology Division of the Ministry of Posts, Telecommunications and Information Technology.
ADN Telecom Limited was listed on the stock exchange in 2019. The company, categorized under “A” category, has a total paid-up capital of BDT 646.52 million, with 64,651,666 shares in circulation. As of March 31 this year, 42.81 percent of the shares were held by sponsors and directors, 23.54 percent by institutional investors, 1.99 percent by foreign investors, and 31.66 percent by general investors.
