Confusion over paper shares leads to PRAN's downgrade to Z category
The company, however, argued that the downgrade stemmed from a misunderstanding
The Dhaka Stock Exchange (DSE) has downgraded Agricultural Marketing Company Limited (AMCL), widely known as PRAN, to the "Z" category, despite the company's claim that it disbursed its entire declared dividend within the stipulated timeframe, sparking confusion among investors.
According to a DSE notification, PRAN was moved from the "A" category to the "Z" category with effect from tomorrow (5 February), citing failure to comply with dividend disbursement rules set by the Bangladesh Securities and Exchange Commission (BSEC).
Under a BSEC directive, any listed company that fails to distribute at least 80% of its approved dividend within the prescribed period is subject to downgrading.
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PRAN, however, strongly challenged the decision, arguing that the downgrade stemmed from a misunderstanding rather than any violation of regulatory requirements.
Touhiduzzaman, deputy general manager at Pran-RFL Group, told The Business Standard that the company had fully disbursed the dividend declared for the 2024-25 fiscal year in line with existing rules and long-standing market practices.
He explained that as an oldest company, around 23% of PRAN's shares are still paper-based, while the remaining 77% have been converted into electronic form.
"Dividends for electronic shareholders were paid through the banking channel, while dividends for paper-based shareholders were disbursed through bank cheques, a method the company has followed for years," he said.
According to Touhiduzzaman, also head of public relations at the group, the DSE, while assessing compliance, considered only dividends paid to electronic shareholders—77% of the total—and concluded that PRAN failed to meet the BSEC's 80% requirement, resulting in the downgrade.
He said the company later engaged with the relevant DSE officials and clarified that dividend payments to paper-based shareholders should also be factored into the calculation, as they form a legitimate component of the total disbursement.
"After reviewing the disbursement process, the DSE officials agreed that there had been a misunderstanding," he said.
Touhiduzzaman added that the issue has been resolved through discussions, and the DSE has assured the company that the categorisation will be corrected in the coming working days.
