42 firms under Dhaka bourse scanner

Owners of some of these companies concealed true status of their businesses, leaving shareholders in the dark

DSE findings so far

  • 4 September: Team was sent to inspect factory of Northern Jute Manufacturing Company
  • 5 September: Team was sent to inspect head office
  • Factory was found closed
  • A company named OMC Limited was found to be using Northern Jute’s head office

The Dhaka Stock Exchange (DSE) is set to investigate the operational status of 42 listed firms and determine the reasons behind their non-compliance with the listing rules.

Some of these companies raised funds from the investors through the stock market, but deprived them of their dividends. Also, some did not publish their financials, leaving their shareholders in the dark, and also did not hold annual general meetings (AGMs) regularly.

An official from the DSE responsible for handling these matters stated that the owners of some listed companies have concealed the true state of their operations and businesses, which has kept shareholders unaware of the companies’ status.

Consequently, this has given rise to rumours about these underperforming firms, ultimately leading to the manipulation of share prices.

He said some of the firms that had been off-production and did not pay any dividend for years, witnessed a stark increase in their stock prices. This is why, for the interest of investors, the DSE decided to scrutinise the companies to find out their actual condition.

According to sources, the DSE wrote to the Bangladesh Securities and Exchange Commission (BSEC) earlier this year seeking permission for investigating 42 non-performing listed firms.

This July, the BSEC allowed the DSE to inspect 14 of the 42 firms.

The Dhaka bourse formed several teams to scan these 14 firms, including Northern Jute Manufacturing Company where a team was sent for inspection last week.

On Sunday, the DSE said in a disclosure that its inspection team visited the company’s factory premises on 4 September and its head office the next day only to find the factory fully closed and the head office being used by a company named OMC Limited.

The BSEC is yet to allow the premier bourse to investigate the remaining 28 companies.

After completing the inspection, the bourse will submit its findings to the BSEC. The commission will then take necessary steps based on the DSE’s inspection report.

In July, DSE’s Chief Operating Officer M Saifur Rahman Majumdar said “We wrote to the securities regulator seeking permission to inspect these companies.”

These firms have basically not been regular in holding AGMs, submitting quarterly financials, and paying out declared dividends to their shareholders, he added.

Sector-wise breakdown of the firms under scanner

Of the total 42 firms in the DSE’s inspection list, the majority are from the textile sector. A total 58 companies are listed in the textile sector on the stock exchanges, out of which, 15 are under DSE scanner.

The others are seven NBFIs, four miscellaneous firms, three food and allied, three pharma and chemicals, two banks, two from the engineering sector, two jute companies, and one from footwear, fuel and power, paper and printing, and services and real estate each.

Source: The Business Standard 

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Iram Hoque

Mohd. Iramul Hoque (Iram) completed his bachelor’s degree in Industrial Engineering in 2018 from Purdue University.

He joined Deloitte Consulting LLP as a Consulting Analyst based out of New York City having previously worked in similar roles at PricewaterhouseCoopers LLP & Landis+Gyr.

Iram left consulting and returned to Bangladesh to take up the family business. Realizing the opportunity in the capital market in Bangladesh, Iram worked relentlessly to found Columbia Shares & Securities Ltd in 2021.

Md Saiful Hoque

Md. Saiful Hoque received his bachelor’s degree in Civil Engineering from Columbia University in 1986 followed by a master’s degree from Texas A&M University in 1988. Upon completion of his Graduate Degree, he joined Gulf Interstate Engineering Company in Houston, USA serving as a Project Engineer.

He returned to Bangladesh in 1992 to join Columbia Enterprise Ltd., the family business of Shipping and Freight Forwarding services. In addition, he has built flourishing businesses manufacturing Garment’s Accessories and Fast-Moving Consumer Goods.