The Bangladesh Securities and Exchange Commission (BSEC) has rejected a proposal from the Chittagong Stock Exchange (CSE) to list 35 percent of its blocked shares on the Dhaka Stock Exchange (DSE).

The decision came at the commission’s 967th meeting, presided over by BSEC Chairman Khondoker Rashed Maqsood.

On July 13, at its 143rd board meeting, CSE decided, under the Exchanges Demutualization Act, 2013, to sell the shares that have remained blocked for over a decade. It subsequently sought BSEC’s approval.

CSE’s plan was to list the shares on the DSE, with 20 percent to be sold to four to five reputed local and foreign institutions that are not current shareholders of CSE, and the remaining 15 percent to be offered to general investors through a special book-building process.

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The commission, however, said there is a restriction on directly listing the shares of any private company, other than state-owned enterprises, on the stock exchange.

It also said that CSE’s proposed 20 percent private placement and 15 percent public placement are inconsistent with the Demutualization Act.

Citing further deficiencies in the application, the commission said CSE lacked operating profit from its core business, failed to attach an information document or prospectus and did not include copies of the board and shareholder meeting resolutions.

As the proposal was found to be inconsistent with the law and not submitted in compliance with the rules, BSEC declined to allow the listing of CSE’s blocked shares on the DSE.