DSE flags 30 closed firms, publishes list to alert investors amid rising manipulation risks

Infographic: TBS

The Dhaka Stock Exchange (DSE), the country's premier bourse, has identified and published a list of 30 closed or non-operational companies from the manufacturing sector, including two state-owned firms, that have raised funds from the capital market but remained shut for years.

The move, the first of its kind from the bourse, aims to inform investors about the actual status of these firms and caution them against falling prey to share price manipulation fuelled by rumours about the operations of such companies.

Hamid Fabrics, a listed textile firm, became the latest addition to the list after declaring a lay-off in operations today (22 September), citing a prolonged gas crisis. 

Earlier, on 12 August, Rahima Food Corporation also suspended production at its cashew nut processing plant and closed operations.

The other firms in the list have remained shut since between 2020 and 2025, while one has been closed since 2002, according to the list published on the DSE website.

Meanwhile, on the same day, the bourse also downgraded Baraka Power and Zaheen Spinning Mills to the Z category due to continuous production closures of more than six months, following a directive issued by the Bangladesh Securities and Exchange Commission (BSEC) in May 2024.

The closed firms are – Appolo Ispat Complex, Aramit Cement, Aziz Pipes, Baraka Power, Dulamia Cotton, Emerald Oil, Familytex (BD), GBB Power, Generation Next Fashions, Khulna Power Company, Khulna Printing and Packaging, Meghna Condensed Milk, Meghna PET Industries, Metro Spinning Mills, Mithun Knitting, New Line Clothings, Northern Jute, Nurani Dyeing, Prime Textile, RSRM, Regent Textile, Shurwid Industries, Standard Ceramics, Tung Hai Knitting, Yeakin Polymer, Zaheen Spinning Mills and two-state owned firm Syampur Sugar Mills and Usmania Glass Sheet Factories. 

Minhaz Manna Emon, a shareholder director on the board of the DSE, told The Business Standard, "The decision to publish the list of closed companies has mainly been taken to make investors aware and keep them informed. Because investors, not knowing the actual condition of companies, often fall victim to rumours or false information that lead to share price manipulation."

"For a long time, there has been a demand to publish the list of closed or non-operational companies on the stock exchange's website. This is because, apart from the stock exchange, there are very limited opportunities for others to know the real picture of listed companies," he said.

"In the latest DSE board meeting, four shareholder directors strongly raised this demand in line with stakeholders' concerns, aiming to provide accurate information to investors. After discussion, the board decided to publish the list of closed companies," he added.

He further noted, "It is the right of investors to know whether a company is in production or not. But investors have long been deprived of this information. Moreover, rumors about closed companies have often been spread, which affected their share prices."

"Now that the actual status of the companies has been disclosed, investors can invest in such firms at their own responsibility and risk," he added.

Hamid Fabrics shut by gas crisis

Hamid Fabrics said in its disclosure that due to insufficient gas pressure, production has been disrupted for the past two years. To keep operations running, the company resorted to CNG and LNG, but the worsening crisis has severely affected production.

In this situation, under Sections 12 and 16 of the Labour Act 2006 and Sections 25 and 26 of the Bangladesh Labour Rules 2015, the factory has been declared under lay-off from 22 June until further notice.

The authorities are making every effort to resolve the gas problem, and it is expected that the shortage will be solved very soon, after which the factory will resume operations.

Rahima Food halts coconut oil business

On 12 August, Rahima Food Corporation Limited temporarily halted production at its coconut oil and cashew nut processing plants, citing weak market penetration and raw material shortages.

In its reply to the DSE queries, it said it had launched coconut oil production and marketing on 17 February 2022 with high expectations of profitability. However, despite operating for over three years, the product has yet to achieve the desired market penetration. 

"We view this as a valuable learning experience. To ensure long-term sustainability, we have temporarily paused production while actively exploring alternative strategies for optimising both production and marketing," the disclosure stated. 

Meanwhile, the firm is advancing its previously announced plan to bottle and market soybean and mustard oil, disclosed on 14 February 2022. Rahima Food said implementation is progressing steadily, and it expects to commence commercial operations "very soon."

Z-category stocks hit 100

With the downgrading of Baraka Power and Zaheen Spinning Mills today, the number of Z-category stocks has now reached 100.

Previously, companies were downgraded to the Z category for failing to declare dividends. 

Later, following a fresh directive from the stock market regulator, non-AGMs, non-operational firms, and companies with negative retained earnings exceeding their paid-up capital were also included in the Z category.

If a firm is downgraded to the Z category, its share settlements face delays, no margin loans are provided for purchases, and transactions can only be made in cash.

While the share settlement cycle for A- and B-category stocks follows a T+2 system, Z-category stocks follow a T+3 settlement cycle.

A total 360 firms are listed on the bourse, 217 remained on A category and 80 on B category.