BSEC rejects Himadri's 100% stock dividend proposal over audit concerns
According to the firm’s filing with the Dhaka Stock Exchange (DSE), the commission said it was “not in a position to accord consent” to increasing the paid-up capital via the proposed bonus-share issuance.
The Bangladesh Securities and Exchange Commission (BSEC) has rejected Himadri Limited's plan to issue a 100% stock dividend, citing qualified opinions in the company's latest audited financial statements.
According to the firm's filing with the Dhaka Stock Exchange (DSE), the commission said it was "not in a position to accord consent" to increasing the paid-up capital via the proposed bonus-share issuance.
The BSEC flagged concerns over intangible assets, tax liabilities, and capital reserves in Himadri's FY2024-25 audited accounts, raising doubts about the company's readiness for such a large bonus.
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Following the announcement, Himadri's share price remained unchanged at Tk688.90 during the day's trading. The board had earlier recommended a 5% cash dividend alongside the 100% stock dividend for FY25.
For FY25, the company reported earnings per share (EPS) of Tk3.81, up from Tk3.42 in the previous year. Its net asset value (NAV) per share stood at Tk522.87, slightly higher than Tk522.19 a year earlier, while net operating cash flow per share (NOCFPS) dropped to Tk1.70 negative.
The rejection comes amid regulatory scrutiny of Himadri's aggressive share-capital expansion.
In FY23, the company issued a massive 250% stock dividend, which significantly inflated its number of shares. Before that stock dividend was declared, Himadri's share price soared above Tk7,000 each. After the record date and subsequent price adjustment, the stock plunged to around Tk2,168, raising concerns among investors about speculative trading and unrealistic price movements.
