BSEC extends Reckitt's foreign shareholders dividend payout

 Highlights: 

• A 1,730% cash dividend for 2025
• Dividend payout: Tk173 per share
• Total dividend payout: Tk81.74cr
• The parent company, Reckitt Benckiser UK, holds an 82.96% stake
• It will receive Tk67.81cr as a dividend

Amid delays in tax clearance, the Bangladesh Securities and Exchange Commission (BSEC) has extended the deadline until September for Reckitt Benckiser (Bangladesh) to disburse dividends to its foreign shareholders.

The regulator also granted the multinational a waiver from a May 2024 directive requiring listed companies to disburse at least 80% of approved dividends within a stipulated timeframe or face a downgrade to the "Z" category.

The stock market regulator notified Reckitt Benckiser (Bangladesh) PLC of the decision in a letter dated 10 August, also informing the two stock exchanges.

When asked about the matter, Md Nazmul Arefin told The Business Standard, "We need to obtain a certificate from the National Board of Revenue (NBR) to remit dividends to the company's foreign shareholders."

"We applied to the NBR, but have yet to receive the certificate. That is why we applied to the commission for a time extension to pay the dividends," he added.

Reckitt Benckiser, for the 2025 fiscal year, approved a massive 1,730% cash dividend —equivalent to Tk173 per share— amounting to a total payout of Tk81.74 crore.

However, the dividend repatriation has stalled because its majority shareholder, UK-based Reckitt Benckiser PLC, holds an 82.96% stake in the Bangladesh subsidiary and is entitled to Tk67.81 crore of the total dividend.

Under capital market rules, listed companies must complete dividend disbursements within 30 days of shareholder approval. Reckitt secured shareholder approval at its annual general meeting on 21 May.

Failure to disburse at least 80% of the declared dividend within the stipulated period constitutes regulatory non-compliance and triggers an automatic downgrade to the junk "Z" category.

Amid administrative delays at the tax authority, Reckitt applied to the stock market regulator on 29 July for an extension and exemption from the category-transfer directive.

In response, the BSEC relaxed its enforcement rules, granting the company relief from the non-compliance and extending the final compliance deadline to 30 September.

 The BSEC letter said the company must complete the 2025 dividend disbursement process by 30 September.

 According to central bank guidelines, foreign dividend repatriation must be processed through a nominated authorised dealer bank based on auditor-certified applications.

Before approving the transfer, banks must verify that the profits arose from regular operations and that all prior losses, tax liabilities and government subsidies have been fully adjusted.

To avail of reduced withholding tax rates under Double Taxation Avoidance treaties, companies must obtain an official clearance certificate from the NBR under Section 119 of the Income Tax Act 2023.

In 2025, Reckitt Benckiser reported Tk566.44 crore revenue, and Tk81.70 crore profit.