Jamuna Bank Capital seeks BSEC nod to sell Tk21.26cr locked Alif sponsor shares

The merchant bank has sought BSEC’s intervention to unlock the shares, sell them and recover the outstanding loan.

Jamuna Bank Capital Management Ltd (JBCML) has sought Bangladesh Securities and Exchange Commission (BSEC) permission to sell Tk21.26 crore worth of pledged sponsor-director shares of Alif Industries Ltd and Alif Manufacturing Company Ltd to recover outstanding margin loan liabilities.

The shares are locked with Central Depository Bangladesh Ltd (CDBL), preventing JBCML from selling them. The merchant bank has asked BSEC to unlock the shares and issue necessary directions for their sale and recovery of the outstanding loan.

According to JBCML’s application filed on 14 July 2026, Md Azimul Islam, a sponsor-director of both companies, obtained margin financing against his sponsor-director shares. The shares later lost significant value, causing the equity-to-debt ratio of the margin account to fall below the required level.

JBCML said it repeatedly asked Islam to settle the liabilities or provide additional margin through notices, emails and letters, but the account remained irregular. Documents show notices were issued seven times between 21 October 2021 and 20 January 2026.

Tk47.55cr liability against Tk27.84cr shares

JBCML’s accounts as of 30 June 2026 show a total liability of Tk47.54 crore against pledged shares originally purchased for Tk50.47 crore. Their market value has since fallen to Tk27.84 crore.

Of the portfolio, shares worth Tk21.26 crore are locked with CDBL, while Tk6.58 crore worth remain saleable. The portfolio has negative equity of Tk19.57 crore, while interest on the margin loan has also remained unpaid for a long period, according to JBCML.

“We issued multiple notices and letters to the client, but received no response. So we have now approached the BSEC to recover the outstanding margin loan,” a senior JBCML official told TBS on condition of anonymity.

However, Islam, managing director of Alif Group, said he had repeatedly asked the merchant bank to resolve the issue.

“I have told them several times to resolve the issue, but they have not done so yet. Since these are sponsor shares, I took the loan against those shares,” he said.

He alleged that JBCML was preventing him from trading while continuing to charge interest on the loan.

“They are not allowing me to trade. At the same time, they are charging interest on the margin loan. I do not think this is fair,” he said, adding that he might have covered the losses had he been allowed to trade.

Why the shares are locked

JBCML said the shares were saleable before 21 May 2019 but were subsequently locked with CDBL following BSEC directives issued that month.

Under the notification, sponsors and directors, excluding independent directors, must collectively hold at least 30% of a listed company’s shares. The restricted shares cannot be sold, transferred, transmitted or pledged.

However, the notification allows transfer of pledged shares confiscated due to loan default. Citing the provision, JBCML has sought BSEC permission to unlock and sell the shares. The notification does not automatically permit such sales following a default, requiring separate regulatory approval.

Alif shares and business

Alif Industries shares are trading at Tk31.90 on the DSE, while Alif Manufacturing shares are at Tk5.30. The companies posted 2024 profits of Tk10.43 crore and Tk8.68 crore, respectively.

Alif Industries produces export-oriented garments, while Alif Manufacturing produces cotton yarn. The group planned to merge the companies in 2023 and later agreed to acquire denim maker Royal Denim.

In April 2026, both companies’ boards also made preliminary decisions to transfer strategic control and management to US-based JIT International, subject to regulatory approval.

Source: The Business Standard