BRB Cables buys 18% share in Eastern Cables from stock market

BRB cable Industries has bought nearly 18% shares in Eastern Cables Ltd (ECL), a state-owned lose- making listed firm, from the stock market.

The buy-sell through share market took place over a year that resulted in gaining four seats for BRB on the Eastern Cables limited board.

The development is a bid to establish monopoly in the huge domestic cable market by BRB that now holds around 40% domestic market share, industry sources said.

Chairman of BRB Cable Industries Md Mozibar Rahman, said: “BRB Cables’ experience and expertise in the sector will help Eastern Cables improve their business. BRB has no intention to interfere in Eastern Cables' internal matters and take any illicit benefits from the company through its ownership.”

‘We have bought more than 30% of ECL’s total shares in the market,” Mozibur told the Dhaka Tribune.

Currently, the stock market has 49% share of ECL, while 51% is owned by the government.

Currently, BRB Cable Chairman Md Mozibar Rahman holds 5.66% shares, while Directors Emadadul Haque holds 5.10%, Shamsur Rahman holds 2.04%, and Executive Director Mofizur Rahman holds 4.96%  shares. 

With the new inclusion of board directors, ECL removed four directors who are from private sector.

The directors  losing their status are former CEO of LankaBangla Finance Nasir Uddin Chowdhury, director STS Holding Ltd Mahbubul Anam, Member of Dhaka Stock Exchange Shahudul Huque Bulbul, and businessman Afsar Uz Zaman.

The past four directors had no minimum number of shares in ECL, required to become directors and remain the directorship of a listed company.

As per the rules set by the Bangladesh Securities and Exchange Commission (BSEC), any individual or institution is eligible to become a director of a listed company, if they or the institution holds a minimum 2% share of the company.

BRB  has now nearly 40% market share, with above dozen of cable products dominating the local cable business.

BRB Cable Industries Ltd. a private Limited Company was established in 1978. The company is now a leading manufacturer of XLPE & PVC Insulated LT & HT Cables, FRLS Cables, House and Appliances Wiring Cables, Dry & Jelly filled Telecommunication Cables, Instrumentation Cables, Aluminium Overhead Conductors, Dual Coated Super Enamelled Copper Wire (Winding Wire) and Marine Type Cables.

The factory of BRB is situated at BSCIC Industrial Estate, 5 KM from Kushtia town.

On the contrary, Eastern cables products list is limited to a number of products including domestic cables and power cables. The government holds 51% stake of the company, while public, sponsors and institutes own the remaining 49 %.

ECL has nine directors, five of whom are appointed by the government, while the remaining four are shareholding directors.

A senior official at ECL opined that it would be a bad practice to include BRB officials on their board, citing conflict of interest. 

On the other hand, BRB officials concerned said they can offer expertise to the state-owned company and make it more efficient.

Chairman of BRB Cable Industries Md Mozibar Rahman said. “As an individual investor, I have every right to buy shares in a company within the legal framework. I am legally eligible to become a board member.”

Mozibar furthered that experienced businessmen on the board of directors of any state-owned company will be good for its growth, as they can run businesses more efficiently.

Executive Director of BRB Cable Industries Mofizur Rahman said that their expertise can help the company make higher profits.

ECL authorities fear  with the inclusion of BRB official on the board, confidential information might be leaked to its prime competitor in the market, which in turn will cause the company to incur huge financial losses, sources said.

According to the latest information on the Dhaka Stock Exchange (DSE) website, the government now holds 51%, sponsors and directors hold 10.76%, institutional investors hold 6.71%, and general shareholders hold 31.53% of ECL's shares.

Eastern Cables, a subsidiary company of Bangladesh Steel and Engineering Corporation, got listed at the DSE in 1986, and at the Chittagong Stock Exchange (CSE) in 1997.
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