The issuers of listed securities shall pay off the dividends within 30 (thirty) days of declaration or approval, as the case may be, according to a regulatory provision.
Cash dividends are to be transferred to the bank accounts of securities’ holders while stock dividends into BO (beneficiary owner’s) accounts.
The companies’ category still remains the same despite their failure to pay out returns on investments within the stipulated time.
Of the companies, 11 are listed in the main board while the other four are on the SME board.
The regulator is working to collect further information about the companies that have not distributed dividends, said Dr. Shaikh Shamsuddin Ahmed, a commissioner of the Bangladesh Securities and Exchange Commission (BSEC).
“The matter will not remain as unaddressed and necessary actions will be taken,” he said.
Listed companies are labeled based on the amount of dividends they give to investors.
A company will be in the A category if it has distributed at least 10 per cent dividend or above per share. Companies come under B category for paying dividend less than 10 per cent per share.
Stocks get to be in Z category if they have failed to hold annual general meetings for three years in a row and issue no dividend even for a year.
Six companies are still in the A category despite their failure to meet the criterion set.
The companies are Fortune Shoes, Taufika Food and Lovello Ice-cream, Lub-rref (Bangladesh), Associated Oxygen, Premier Cement Mills and S. S. Steel.
These firms recommended dividends between 5-12 per cent.
Five other companies of the main board are in ‘B’ category and they recommended dividends between 1-3 per cent.
The non-compliant companies of the SME board declared dividends between 10-15 per cent for FY22.
Managing Director of Midway Securities Md. Ashequr Rahman said the securities regulator and the stock exchanges should issue show cause notices to know as to why the companies have not yet distributed dividends.
A company recommends dividend on its financial strength, and its auditor signs the financial reports on completion of a scrutiny.
“If it is so, an investigation should be conducted”, said Mr Rahman, to find out why the companies failed to disburse dividends that were recommended based on financials.
The auditors should also be asked if they approved the financial results.
Responses from companies
Meanwhile, company secretary of Premier Cement Mills, Kazi Md. Shafiqur Rahman claimed that the company had distributed dividends. But the DSE website does not have any declaration in this regard.
Md. Mostafizur Rahman, company secretary of S.S. Steel, said a process was on to pay out dividends.
Representatives of some other companies could not be reached despite repeated attempts.
The DSE website has some announcements regarding non-disbursement of dividends.
A disclosure posted on March 12 said the DSE had issued a query letter to Taufika Food and Lovello Ice-cream. The prime bourse also cited Fortune Shoes as one of the non-compliant.
Source: The Financial Express