The Securities and Exchange Commission (SEC) has directed the trustees to the debentures of two public limited companies (PLCs) to take appropriate measures against those companies for debenture default.

In separate letters on Tuesday to the trustees-- Pragati Insurance Limited and National Credit and Commerce (NCC) Bank Limited -- SEC asked them to submit two reports each month on actions taken against the defaulting companies for nonpayment of principal and interest amount on debentures.

Both these companies are trustees to Bangladesh Zipper Industries Limited as well as Bangladesh Luggage Industries Limited.

As per the SEC instruction the first report must be filed on the first day of the month while the second one should follow after two weeks in the same month.

In the current month, the capital market regulators sought the first report to be submitted by September 7, 2003.

Although the SEC repeatedly asked these trustees to take appropriate actions as prescribed in the trust deeds, nothing was done, sources said.

"They failed to initiate any move to settle the claim from the debenture-holders," a senior SEC official said.

The official said they have received a number of complaints from the debenture holders of which SEC has sent copies of 41 complaints to the trustees which had not been addressed.

The two companies, Bangladesh Luggage and Bangladesh Zipper, raised a total of Tk 19 crore through issuing debentures. Bangladesh Luggage raised Tk 15 crore in September 1996 while Bangladesh Zipper raised Tk four crore in July 1995.

The total default amount of both the companies stands at Tk 7.18 crore -- Tk 6.08 by Bangladesh Luggage and Tk 1.10 crore by Bangladesh Zipper.

Of the total default amount by Bangladesh Luggage, the company owes Tk 2.92 crore to Investment Corporation of Bangladesh (ICB) alone.

Despite repeated attempts, the managing directors of trustees could not be reached for their comments.