Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
The stock market regulator has ordered 14 listed companies—who failed to pay dividends timely—to appear before it on Sunday.
Bangladesh Securities and Exchange Commission (BSEC) asked the chairmen, managing directors, and company secretaries of these companies to be present at 10am, according to BSEC spokesperson and executive director Mohammad Rezaul Karim.
They were also asked to bring along with themselves relevant documents.
Those 14 companies are Lub-rref (Bangladesh) Limited, SK Trims & Industries Limited, Shepherd Industries PLC, VFS Thread Dyeing Limited, Fortune Shoes Limited, Associated Oxygen Limited, Desh Garments Ltd., Indo-Bangla Pharmaceuticals Limited, Beach Hatchery Ltd., Advent Pharma Limited, Khulna Power Company Limited, Libra Infusions Limited, Pacific Denims Limited, and Union Insurance Company Limited.
These companies declared dividends for share holders but failed to pay in the stipulated time. Last month they were downgraded to the 'junk' or 'Z' category.
Now the BSEC will ask them why they have failed to pay dividends and will order them to pay the divided earliest possible time.
Mr Karim said, “We are working to ensure the safety of investors and bring good governance in the stock market. As part of this, we are working with short- and long-term plans, and the stock market will soon get the results.”
Earlier in a major push to enforce compliance, BSEC ordered to downgrade 27 listed companies to the 'junk' or 'Z' category, including these 14 companies, as half of them failed to declare any dividends for two consecutive years and the others did not complete the distribution of approved dividends.
According to the BSEC directive, a company will be transferred to 'Z' category if it fails to disburse at least 80 per cent of the declared dividend within the stipulated timeframe.
These companies declared nominal cash dividends between 2 per cent and 5 per cent for FY23.
But they failed to complete the distribution of the dividend within one month of holding the AGM (annual general meeting). So, they were shifted to the 'Z' category.
Experts say that companies announcing dividends without properly assessing their capacity to make payouts have, in fact, deceived shareholders.
Investors make decisions about taking their positions in a company based on the record date following the dividend declaration. Companies that failed to complete dividend distributions have negatively impacted their price movements.