S Alam factory shutdown pushes DSE’s shuttered firms list to 35

Inforgraphics: TBS

The growing number of inactive listed companies has become a challenge for Bangladesh's capital market, with the shutdown of S Alam Cold Rolled Steels Ltd pushing the Dhaka Stock Exchange's (DSE) shuttered firms list to 35.

The development has increased concerns over inactive listed companies and raised questions over regulatory oversight, as investors continue to face uncertainty over firms that remain closed for prolonged periods without adequate disclosures.

According to the latest DSE update, S Alam Cold Rolled Steels suspended factory operations from 1 August 2026, becoming the latest manufacturing company to join the exchange's list of closed or non-operational firms.

In a disclosure, the company said it was unable to continue production due to unforeseen circumstances beyond its control.

The company said its bank accounts were frozen without prior notice after 5 August 2024, while lending banks imposed restrictions on opening Letters of Credit (LCs). The restrictions disrupted imports of raw materials and chemicals needed for production.

It also cited the departure of skilled workers, creating an acute manpower shortage. The combined challenges of raw material shortages, chemical supply disruptions and workforce constraints eventually forced the factory to shut down.

S Alam Cold Rolled Steels said it is working to resolve the problems and intends to resume production once conditions improve.

However, it warned that failure to restart operations soon could have a significant impact on its financial condition.

Shares under pressure

The shutdown has increased uncertainty surrounding the company's future.

Since the closure on 1 August, the company's share price has declined 9.28%. On Thursday, the stock fell 2.31% to close at Tk12.70 on the DSE.

Earlier this year, the company was downgraded from the B Category to the Z Category after failing to hold its Annual General Meeting (AGM).

Investor concerns have also increased as the company has not published any financial statements since the quarter ended March 2024.

Inactive firms continue to rise

With S Alam Cold Rolled Steels joining the list, the DSE now has 35 closed or non-operational industrial companies.

DSE sources said some companies informed the exchange about operational problems, while others failed to disclose factory closures. In some cases, inspections by the exchange found that factories had already stopped operations.

Most of these companies suspended operations between 2020 and 2026, although some have remained inactive for much longer.

Meghna PET Industries has remained closed since 2002, making it the longest-shuttered listed manufacturing company on the DSE. Bangladesh Welding Electrodes has also remained non-operational since 2016.

The list includes companies from steel, textiles, power, cement, engineering, ceramics, food processing and chemical sectors. The latest additions include Active Fine Chemicals, AFC Agro Biotech and S Alam Cold Rolled Steels.

The DSE introduced the list to improve market transparency and protect investors from rumours and speculative trading involving inactive companies.

Regulators seek stronger action

According to DSE data, 360 companies are currently listed on the exchange. Of them, 160 are in the A Category, 74 in the B Category and 126 in the Z Category, where many inactive firms are placed.

DSE Managing Director Nuzhat Anwar told The Business Standard that the exchange is closely tracking inactive companies, including their share price movements, while engaging with management over their revival plans.

"We are closely monitoring the price movements of these companies. At the same time, we are discussing with their management how they can resume operations and what plans they have to revive their businesses," she said.

She added that the DSE is updating its Listing and Delisting Rules to strengthen the framework for dealing with inactive companies.

DSE Director Minhaz Mannan Emon said many listed companies have remained inactive for years.

"If a company repeatedly fails to declare dividends, hold AGMs, pay DSE fees and continues to remain non-operational, it eventually falls into the Z Category and may ultimately face delisting," he said.

He said delisting remains difficult due to lengthy legal procedures and limitations in existing regulations.

"Delisting is a normal practice in capital markets around the world. The DSE is actively working on this issue. Once the updated regulations come into effect, tougher decisions may be taken where necessary," he added.

BSEC Executive Director and spokesperson Md Abul Kalam said stock exchanges have the authority to act against companies that remain closed for years or fail to publish financial statements.

"Under the existing laws and listing regulations, stock exchanges have the authority to list or delist companies. Whatever decision the exchange takes in accordance with the regulations, the Bangladesh Securities and Exchange Commission will extend the necessary regulatory support," he said.

Market participants said the rising number of inactive companies is weakening investor confidence. They called for stronger measures, including restructuring, sponsor changes, mergers, takeovers or delisting of long-defunct companies to improve market discipline.