Three more firms downgraded to Z category over dividend failures, total reaches 94

The Dhaka Stock Exchange (DSE) has downgraded three more companies to the Z category for failing to distribute approved dividends within the stipulated time frame.

The companies are Bangladesh Building Systems, Rahima Food Corporation, and Beacon Pharmaceuticals.

In separate disclosures on its website yesterday, the DSE stated that the downgrade was effective from 4 February (yesterday), in line with a directive from the Bangladesh Securities and Exchange Commission (BSEC).

Previously, Bangladesh Building Systems was in the B category, while Rahima Food Corporation and Beacon Pharmaceuticals were in the A category.

On Monday, Kay & Que (Bangladesh), a publicly listed company, was also downgraded to the Z category for the same reason.

With the latest downgrades, the total number of firms under the Z category now stands at 94, out of approximately 400 listed companies.
According to DSE regulations, listed companies must disburse declared or approved dividends within 30 days of approval in their AGM. If a company delays the disbursement, it may face a fine of Tk5,000 per day until compliance is met.

The disclosures also stated that stockbrokers and merchant bankers have been requested to refrain from providing loan facilities for purchasing securities of these companies.

However, despite the downgrade, the share price of Bangladesh Building Systems rose by 1.94% to Tk10.50 each today.

According to the DSE, the company had recommended a 0.5% cash dividend for its shareholders for FY24, which was approved in its AGM held on 23 December. However, the company did not submit the dividend compliance report to the DSE which has to be submitted within seven days after disbursing dividend.

Meanwhile, Rahima Food Corporation's share price fell by 2.03% to Tk77.10 each yesterday. It had recommended a 10% cash dividend, which was approved in its AGM held on 23 December as well. However, the company failed to disburse the approved dividend to its shareholders.

Beacon Pharmaceuticals faced a similar situation. The company had recommended a 20% cash dividend for its shareholders, which was subsequently approved in its AGM on 23 December.

However, it did not submit the dividend compliance report, leading to its downgrade to the Z category. Yesterday, Beacon's share price declined by 2.84% to Tk123.20 each.