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Beximco Pharmaceuticals' stock plunged 2 per cent on Sunday on the Dhaka Stock Exchange (DSE) following news that trading of the stock is set to be suspended on the London Stock Exchange on January 2 next year.
The pharmaceutical company was listed in Bangladesh in 1986, while it issued Global Depository Receipts (GDRs) on the Alternative Investment Market (AIM) of the London Stock Exchange in 2006.
A GDR is a financial instrument that represents shares of a foreign company, allowing international investors to invest in it. In the case of Beximco Pharma, trading of these GDRs in the London market will be suspended as the company failed to publish its audited annual financial report within the stipulated timeframe.
In a regulatory filing on the London Stock Exchange last week, Beximco Pharma stated that it would not be possible to publish the annual report for the year ended June 2025 by year-end, as required by the AIM rules.
Beximco Pharma said the main reason for the delay is an ongoing case in the High Court challenging a decision of the Bangladesh Securities and Exchange Commission (BSEC) regarding the appointment of nine independent directors to the company's board.
Salman F Rahman, vice-chairman of Beximco Group, was a private sector industry and investment adviser to the Hasina-led Awami League government. Following the fall of the previous regime, the newly formed securities commission appointed independent directors to Beximco Pharma's board in January this year.
Beximco Pharma explained that due to the court's vacation and bench reconstitution, the case will need to be heard afresh, and no verdict is expected before January 2026.
As a result, board meetings to approve the accounts cannot be held, which will ultimately delay the publication of the financial statements, the company said on the London market.
Beximco Pharma, which follows a July-to-June financial year, is yet to publish its financial statements for FY25, although the stipulated timeframe has already passed for the local market.
As per listing regulations in Bangladesh, listed companies must complete audits of annual financial statements within 120 days after the end of the financial year and submit the audited reports to the stock exchanges and the BSEC within 14 days of audit completion.
"We have received a time-extension application from Beximco Pharmaceuticals, and the commission will take a decision in this regard shortly," BSEC spokesperson Abul Kalam told The Financial Express over the phone.
Mr Kalam said there is no provision in Bangladesh to suspend trading of any stock due to failure to submit financial statements on time.
Generally, the commission allows extended time to submit financial statements if it finds the explanation for additional time satisfactory.
"If a company fails to provide a satisfactory explanation in favour of time extension, the commission then goes for regulatory action, such as imposing fines," said Kalam.
However, Kalam added that Beximco Pharma could publish audited annual financial statements upon receiving approval from independent directors within the timeframe, as there is no bar on that.
Beximco Pharma claimed that the suspension of GDR trading in London will not affect share trading in the local market. Trading in Beximco shares on the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) will continue as usual, it said.
The drug maker also said all disclosures would be made regularly in accordance with AIM rules during the suspension period.
Financial Performance
Beximco Pharmaceuticals posted a 26 per cent year-on-year growth in profit to Tk 5.83 billion in FY24. The company also disbursed a 40 per cent cash dividend for FY24, increased from a 35 per cent cash dividend paid for FY23.
Though the company has been in a beleaguered situation since the fall of the Hasina regime in August last year due to its close links to it, its half-yearly profit jumped 18 per cent year-on-year to Tk 3.54 billion for the period ended December last year.
The company has not updated its financial performance.
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