Best Holdings Limited, the owning company of Le Méridien Dhaka hotel, has attempted to debut on the stock market through a direct listing to raise capital, but people related to the market describe the bid as “fraudulent”

The Dhaka Stock Exchange has backed the private company’s bid to use the alternative route to an initial public offering or IPO. But the problem is that the direct listing privilege is afforded to government firms only.

That Best Holdings can raise funds without the expense of an IPO is based on the argument that some state-owned banks have invested in the firm.

But the Securities and Exchange Commission or SEC has cast doubt on the authenticity of a letter sent in the name of Finance Minister AHM Mustafa Kamal.

The market wtachdog has decided to dig deep to avert overseeing a probable shady deal. It has raised several other questions and sought explanations from the premiere bourse. The direct listing of Best Holdings will not go ahead until all the issues are settled, the BSEC said in a recent letter.

RACE Asset Management, owned by Chowdhury Nafeez Sarafat, and state-run Investment Corporation of Bangladesh are the issue managers of Best Holdings, which is trying to raise more than Tk 2.38 billion through a direct listing.

Those pulling strings to get the direct listing of the company tried to wield influence over the process in a clear breach of rules, said several people related to the market.

“It’s going to be a big fraud. The regulator must act against it now,” said a former DSE director, who requested to be anonymous.

The SEC had earlier received a letter purportedly signed by Finance Minister Kamal recommending an amendment to the rules of direct listing without naming Best Holdings. But the SEC is not sure whether it was indeed from the finance minister.

bdnews24.com could not reach Kamal for comments.