Unpaid listing fees keep two OTC cos from moving to SME board
Transfer of two OTC companies to the SME board of the Dhaka Stock Exchange (DSE) remains pending mainly for non-payment of listing fees and non-existence of a company website with detailed financial information.
Gachi Hata Aquaculture Farms and Bangladesh Hotels are among the 51 firms that were delisted from the main board in 2009 as they had been non-operational for long and failed to hold annual general meetings. Then the Bangladesh Securities and Exchange Commission (BSEC) launched the over-the-counter market to facilitate the trading of the delisted companies' shares.
Seven OTC companies, including the two mentioned above, have got permission to move to the SME board, according to a directive issued by the securities regulator in September 2021, since they restored operation.
Rabiul Islam, a manager of the Dhaka bourse, said it had sent a letter to the companies informing what the prerequisites were to be listed on the SME board but did not receive any response.
"The companies' relisting will not be possible until they meet the conditions," he added.
Both the companies have not paid the yearly fees to remain listed in the OTC market and so they have to clear the dues before moving to the SME board.
Md. Aktaruzzaman, managing director of Gachi Hata Aquaculture Farms, said the company had submitted papers to the securities regulator seven months ago on completion of the relevant process to be listed on the SME board.
"But it is still pending and the reason for the delay is unknown to us," he said.
Asked about the non-payment of listing fees, Aktaruzzaman said the company was unable to pay the listing fees as it had remained out of operation for a long time.
"Besides, we are not aware of the specific rules regarding the payment of listing fees by OTC companies." The DSE can either waive the listing fees or provide scope for payments in installments, Aktaruzzaman added.
Bangladesh Hotels could not be reached for information about its preparation for the relisting.
Another major requirement is to have a company website that will let the public know about its financial performance.
Gachi Hata Farms has a website but it does not have all the required data, said the DSE official.
According to the company's financial statement for FY22, Gachi Hata Farms incurred a loss of Tk 21.41 million in the year whereas it had secured a profit of Tk 1.39 billion in the previous fiscal year.
The loss could not be avoided though its revenue increased 59 per cent compared to the previous fiscal year. In the FY22, the company's operating and financial expenses escalated from the previous fiscal year.
The company's managing director Aktaruzzaman said they had continued operation amid a capital shortfall; about Tk 250 million was required for the business to get momentum.
Gachi Hata Aquaculture Farms was listed on the main board in 1998. Sponsor-directors hold 25.86 per cent shares, institutes 18.12 per cent and general investors 56.02 per cent, according the DSE.
No financial information of Bangladesh Hotels could be found as it does not have a website. Its sponsor-directors hold 52.48 per cent shares while general investors hold the remaining 47.52 per cent.
The other OTC companies which have already moved to the SME board as per the regulatory directive are Apex Weaving and Finishing Mills, Bengal Biscuits, Himadri Ltd., Wonderland Toys and Yousuf Flour Mills.