The officials of SEC and DSE at a meeting yesterday stuck to their stances over the issue.

According to meeting sources, SEC explained it approved the initial public offering (IPO) of the companies after they fulfilled necessary criteria. The companies got go-ahead on the basis of their previous performances, the SEC added.

However, the DSE said it had already made some negative observations about some companies and informed the regulator. These companies may not be allowed for listing with the DSE.

Of the total IPOs approved in June, performances of general insurance companies are not satisfactory and investors are at risk of losing a portion of their capital, the DSE observed.

The DSE earlier in a letter made its observation about these general insurance companies and said the DSE listing committee may not approve the applications of these companies considering the interest of investors.

With SEC Chairman Mirza Azizul Islam in the chair, DSE President Shahiq Khan, Chief Executive Officer Salahuddin Ahmed Khan and other officials of both the organisations were present at the meeting.

"We have to see earning per share, net asset value and other fundamental things in case of giving approval to a company. No body can guarantee how much dividend a company will be able to offer in future," SEC chairman told The Daily Star.

If it is said the performance of a company is weak, the weakness should be defined, he said. "I made it clear from my side."

If there is any negative observation, it should be informed timely, he said admitting that the SEC had a communication gap with the DSE and all agreed to reduce the gap.

The DSE in a letter told the SEC that Nitol Insurance should not be allowed to issue IPO due to its poor performance and decline in profitability in recent times. The SEC allowed the company to issue Tk 9 crore IPOs despite strong objection from the DSE.

The DSE listing committee did not give approval to Daffodil Computers Ltd, Khaza Mosaic Ltd, Jago Corporation Ltd and JMI-Bangladesh Company Ltd. Shares of these companies are now being traded on the Chittagong Stock Exchange at below their face value.

The SEC on Wednesday approved prospectus of four non-banking financial institutions (NBFIs) to go public. The companies are Progressive Life Insurance Company Ltd, Sonar Bangla Insurance Company Ltd, Premier Leasing International Ltd and Islamic Finance and Investment Ltd.

Earlier, SEC okayed IPOs of Summit Power, Grameen Mutual Fund, Prime Finance and Investment, Asia Pacific Insurance and Nitol Insurance Company Ltd.

According to sources, giving approvals to nine companies in a single month and allowing them to go public within a short span of time may have a negative impact on the stock exchanges.