10 firms given dividend payout deadlines, fines set for failure

The capital market regulator has set a new deadline for the undisbursed dividends of ten listed firms, warning that failure to comply will result in a total fine of Tk26.83 crore for the companies' directors.

Among these firms, five are listed on the stock exchange's main board, while the other five are on the SME platform. 

The companies whose managing directors and directors may face fines include Safko Spinning Mills, Pacific Denims, Lub-rref (Bangladesh), Oryza Agro, Mamun Agro, Krishibid Seed, Krishibid Feed, BD Paints, Associated Oxygen, and Advent Pharma.

At a commission meeting today, the Bangladesh Securities and Exchange Commission (BSEC) directed the payment of due dividends by 15 December nine firms and fixed amount of fines if they again fail to disburse the declared dividends within the stipulated time.

While the other, Advent Pharma, has been directed to disburse its due dividends to shareholders by 30 November, failing which its directors will also face penalties, according to the BSEC.

According to data available on the websites of the ten companies, there are 42 directors across their boards. Based on the fines imposed on each company's directors, the total penalties could amount to approximately Tk26.83 crore.

According to listing regulations, listed companies are mandated to disburse declared or approved dividends within 30 days after approval in its annual general meeting (AGM).

If any listed companies fail to pay-off dividend within the stipulated time, respective directors shall be jointly and severally liable to pay a penalty of Tk5,000 for every day that the default continues.

According to the BSEC sources, the companies failed to disburse declared dividend for 2021-22, and 2022-23 fiscal within the stipulated time.

So, to comply with the rules, the commission has taken stringent measures against the companies, the sources said.

Previously, at the end of September, the Dhaka Stock Exchange (DSE) downgraded over two-dozen of firms to the Z category owing to failure to pay declared dividend within the stipulated time, and failure to declare dividend for two consecutive fiscal years. 

Later, some companies returned to their previous categories from the Z category as they submitted dividend compliance reports.

Who faces, what fines?

According to a BSEC press release, directors of Safko Spinning Mills will face fines of Tk20 lakh each if the company fails to pay the declared dividend by 15 December. 

Other companies facing penalties include Pacific Denims Tk13 lakh per director, Lub-rref Tk2.35 crore each director, Oryza Agro Tk47 lakh, Mamun Agro Tk13 lakh, Krishibid Feed and Krishibid Seed Tk10 lakh each, BD Paints Tk97 lakh, Associate Oxygen Tk1.91 crore, and Advent Pharma Tk4 lakh. 

Safko Spinning Mills, which recommended a 2% cash dividend for FY2021-22, has not paid the dividend nor published compliance reports in two years.

Pacific Denims, downgraded to the Z category by the DSE for non-payment of its declared dividend, has not published a dividend compliance report. 

Lub-rref, which raised Tk150 crore from the stock market in 2021, failed to pay the 2% cash dividend declared for FY23. The company was downgraded to the Z category by the DSE.

Advent Pharma, downgraded to the Z category on September 25 for failing to pay its FY23 dividend, was later reinstated to the B category after submitting the compliance report.

Associate Oxygen, also in the Z category for non-compliance, recommended a 1% cash dividend for FY23 but has not submitted the required dividend compliance report.