Sponsors, directors of Asiatic Laboratories barred from selling shares

The stock market regulator has barred the sponsors, directors, and placement shareholders of Asiatic Laboratories Limited from selling their shares after irregularities were found in the use of funds from the initial public offering (IPO) and inconsistencies in the company’s expansion plans.

At a meeting of the Bangladesh Securities and Exchange Commission (BSEC) held at its office in the capital today, the commission decided to extend the lock-in period on these shares.

According to a press release issued by the regulator, Asiatic Laboratories had earlier received approval to raise Tk 95 crore through an IPO in 2022.

As per its IPO prospectus, the company planned to use the funds for business expansion, including procurement and installation of machinery, construction of a factory building, repayment of bank loans, and meeting IPO expenses.

However, the company has not yet completed the utilisation of the IPO proceeds.

Despite failing to implement the declared IPO projects, Asiatic Laboratories disclosed price-sensitive information (PSI) on September 28, 2025, announcing an ambitious plan to construct a 32-storey building.

According to the BSEC, the company made the announcement without conducting proper project evaluation, feasibility studies, or obtaining necessary approvals from regulatory authorities, including RAJUK’s building plan approval and environmental clearance.

The regulator further observed that the company lacks prior experience and technical expertise in undertaking such a large-scale construction project.

Moreover, entering into real estate or hotel business through the proposed 32-storey building does not align with the company’s Memorandum of Association.

The Dhaka Stock Exchange (DSE) conducted an inspection into the matter, the BSEC said.

The inspection report identified the same inconsistencies and irregularities regarding the company’s project planning and deviation from declared objectives.

Based on the DSE’s recommendations, prevailing market conditions, and in consideration of protecting general investors’ interests, the BSEC took a strict stance.

The commission decided to extend the lock-in period on shares held by the company’s sponsors, directors, and placement shareholders — 183 individuals and institutions named in the prospectus.

Under the new decision, the lock-in will remain effective for an additional three years from the date of expiry of the existing lock-in period, or until the completion of construction and commercial operation of the proposed 32-storey building — including obtaining the occupancy certificate from RAJUK — whichever occurs later.

Stocks of the pharma company dropped slightly to Tk 68.20 today at the DSE.