BSEC fines Fortune Shoes chairman Tk5cr over unpaid dividends, listing fees 

The Bangladesh Securities and Exchange Commission has imposed hefty financial penalties on the chairman and several officials of the listed company Fortune Shoes over failure to distribute declared cash dividends and pay listing fees, while also approving regulatory relaxations for restructured listed firms and banks. 

The decisions were taken at a commission meeting held today (13 May), according to a BSEC press release. The regulator said Fortune Shoes had declared a 10% cash dividend and 5% stock dividend for the fiscal year ended 30 June 2022, but failed to distribute Tk3.98 crore out of the total declared cash dividend amount of Tk16.25 crore. 

The company also failed to pay Tk18.29 lakh in listing fees owed to the Dhaka Stock Exchange for the previous three years up to 31 July 2023.

The BSEC directed the company to clear the unpaid cash dividends and listing fees within 30 days of the order, warning that failure to comply would harm investors' interests and violate securities laws. As part of the enforcement measures, Fortune Shoes Chairman Md Mizanur Rahman was fined Tk5 crore, the largest penalty among those sanctioned.

Directors Md Amanur Rahman and Robiul Islam, former director Md Khosrul Islam, and Managing Director Roksana Rahman were each fined Tk50 lakh. Chief Financial Officer Jamil Ahmed Chowdhury was fined Tk10 lakh, while former Company Secretary Riaz Uddin Bhuiya and current Company Secretary Md Nazmul Hossain were each fined Tk5 lakh.

The regulator instructed all penalised individuals to deposit the fines within seven days. In another key decision, the BSEC approved a policy relaxation for listed companies whose boards are restructured by primary regulatory authorities.

Under existing securities rules, sponsor-directors of listed companies must jointly hold at least 30% shares. Companies failing to maintain the threshold are generally restricted from raising capital through rights shares, bonus shares and similar instruments. 

However, the commission observed that companies with regulator-restructured boards often face difficulties maintaining the mandatory shareholding requirement because newly appointed directors may not own sufficient shares.

To address the issue, the BSEC decided to exempt such companies from the 30% joint shareholding requirement for capital-raising activities. A formal notification in this regard is expected soon. 

The commission also allowed listed "A" category banks to maintain dividend accounts within their own banks in a move aimed at simplifying dividend distribution procedures and reducing operational complications.