DSE to inspect operational status of 14 non-compliant firms
The Dhaka Stock Exchange (DSE) will conduct an inspection of the operational status and related issues of 14 companies due to their non-compliance with the securities laws and listing regulations.
The Bangladesh Securities and Exchange Commission (BSEC) has recently granted permission to the country's premier bourse to carry out an investigation in order to uncover the facts behind the non-compliance.
According to the BSEC, the 14 companies are Fortune Shoes, National Feed Mills, Central Pharmaceuticals, CVO Petrochemical Refinery, Dulamia Cotton Spinning Mills, Family Tex (BD), Keya Cosmetics, Khan Brother PP Woven Bag Industries, Northern Jute Manufacturing Company, Regent Textile Mills, The Dacca Dyeing and Manufacturing Company, Usmania Glass Sheet Factory, Zaheen Spinning, and Zaheen Tex Industries.
Fortune Shoes declared 10% cash and 5% stock dividends for fiscal 2021-22 for its shareholders but has not yet to disburse the dividends.
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Like Fortune Shoes, the others also failed to comply with the securities laws.
M Saifur Rahman Majumdar, chief operating officer at DSE who is serving as its acting managing director, told The Business Standard, "Basically, the companies are not arranging annual general meetings (AGMs) and did not submit quarterly financials regularly. Also, some companies have not distributed their declared dividends on time."
After inspection, the DSE will submit reports to the commission, which will then take action according to securities laws, according to officials.
Officials at the DSE said it has sent a list of 42 companies that are non-compliant with laws.
"Some listed companies are not compliant with the securities laws. So, seeking the regulator's approval to find out the actual scenario of the companies, the DSE sent a letter to the BSEC," said M Saifur Rahman Majumdar.
He said the DSE has also degraded some companies to the Z category owing to non-compliance.
According to the BSEC, the bourse will inspect the head office and factory premises to know the operational status and allied issues of the 14 companies listed on stock exchanges.
An official at DSE said some companies are not in operation or running at partial capacity, but they are hiding the actual scenario.
"In this situation, the bourse has decided to investigate the companies. But for conducting an investigation into any issuers, approval from the stock market regulator is needed," he added.
According to the BSEC, the companies under scanner are mostly in the B category, which means they pay dividends below 10%.
Four of the companies are from the Z category, and two are from the A category, which means they paid at least a 10% dividend to their shareholders. Z-category companies did not pay any dividends to their shareholders.
As per a source, half of the companies under investigation got listed on the stock market between 2011 and 2016, and four were listed with the bourse before the 2000s.
