The securities regulator turned down the listed companies' association plea for waiving payments of accrued interest gained from undistributed dividends or un-refunded public-subscription funds.
Also rejecting their time-extension appeal, the Bangladesh Securities and Exchange Commission (BSEC) Wednesday asked the listed companies to transfer such funds along with accumulated interest within the given timeframe (August 30).
On August 11, the Bangladesh Association of Publicly Listed Companies (BAPLC) sent a letter to the BSEC chairman seeking exemption from interest payments and time extension for transferring investors' funds into the Capital Market Stabilisation Fund (CMSF).
"…the commission is not in a position to extend time further beyond August 30 to transfer unclaimed or undistributed or unsettled dividends in cash or non-refunded IPO-subscription money and others including an accrued interest held in listed companies to the CMSF," says the BSEC reply to the BAPLC.
Asked, a BSEC official said the rules of the CMSF have already come into effect.
"So, it's not possible to exempt the listed companies from the payments of accrued interest based on the letter of BAPLC only," said a BSEC official.
He said the appeal may be considered on a case-to-case basis following individual applications to be made by listed companies.
"In that case, the securities regulator will check whether the accrued interest had any role in dividends distributed so far," the BSEC official added.
As per the BSEC letter issued Wednesday, the listed companies now will have to transfer unclaimed or undistributed or unsettled dividends or non-refunded public- subscription money and others including accrued interest into the CMSF by the August-30 cutoff time.
Azam J Chowdhury, the BAPLC president, said the formation of the CMSF is an outstanding job and this would help boost the stabilisation of the country's stock market.
"Initially, the listed companies can transfer the principle amounts of undistributed or unsettled or unclaimed dividends or non-refunded public-subscription funds to the CMSF. The transfer of accrued interest on such funds can be settled later," Mr. Chowdhury said.
Preferring anonymity, a market-insider said the BSEC cannot waive accrued interest on undistributed dividends or non-refunded public-subscription money as investors are the owners of such money. "Investors can make claims on undistributed dividend anytime."
On June 27, the securities regulator issued the rules on the formation of the market-stabilisation fund worth Tk 210 billion to be formed with unclaimed or undistributed dividends, non-refunded public subscription, and accrued interest on such funds.
As per the information of the securities regulator, 335 listed companies have unclaimed cash dividends worth Tk 9.56 billion and unclaimed or unsettled stock dividends worth Tk 199.86 billion.
Asked, an official of the BAPLC said the listed companies initially will transfer the principal of unsettled or undistributed dividends or non-refunded public- subscription money.
"Initially, the companies will not transfer the accrued interest on dividends or public-subscription money due to some complexities," the official said.
Meanwhile, the securities regulator has formed a 10-member board of governors to run the CMSF for checks and balances on the bourses that often face ups and downs.
Former principal secretary Nojibur Rahman has been made first board-of- governor chief. It was formed on August 22.
Earlier, the securities regulator had asked the listed companies to transfer the funds into the market-stabilisation fund by July 31.
Detailed information regarding the shareholders or securities holders was also supposed to be submitted within that timeframe. Later, the regulator extended the timeframe till August 30.
In a letter sent to the BSEC chairman on August 11 last, the BAPLC made the plea for excluding the lockdown period from the continuing time for notifying the shareholders and publishing such list on the companies' official websites.
In favour their urge, the BAPLC said due to strict lockdown up till August 10 the listed companies were not able to work on preparing detailed information of the shareholders or securities holders.