22 cos to be relegated to Z category for poor performance
FE Report | Sunday, 18 February 2024
At least 22 companies will be downgraded to junk category today (Sunday) for reasons including negative retained earnings surpassing the amount of paid-up capital.
Of the companies, three will be transferred from 'A' category and the remaining 19 from 'B' category.
The securities regulator and both the bourses have confirmed the development.
The Dhaka Stock Exchange (DSE) has finalised a list of 22 companies a day after the Bangladesh Securities and Exchange Commission (BSEC) issued a directive regarding category-wise placement of companies.
The directive was supposed to be effective from the day of next declaration of dividends or annual/interim corporate declarations of the issuer companies.
Mohammad Saifur Rahman, a BSEC executive director, said this clause would be applicable in case of actions against any issue of non-compliance.
Apart from non-payment of any dividend for two years, a company will be labeled as junk stock for failure to hold AGM (annual general meeting) within a stipulated time, or if it remains out of operations for more than six months.
A company will also be transferred to 'Z' category if its negative balance of retained earnings exceeds the paid-up capital.
Of the companies, Delta Sinners, Keya Cosmetics, and Uttara Finance and Investment will be shifted to junk category for not holding AGMs within the given time. These are 'B' category stocks.
Four companies will be transferred to 'Z' category for not remaining in operations for more than six months and the remaining 15 companies will lose their status for negative retained earnings overshooting the paid-up capital.
These are Alltex Industries, Aramit Cement, Aziz Pipes, Fas Finance & Investment, Intech, International Leasing And Financial Services, National Tea Company, Premier Leasing & Finance, Renwick Jajneswar & Co (bd), Ring Shine Textiles, Safko Spinning Mills, Standard Ceramics, The Dacca Dyeing & Manufacturing Company, Union Capital, and Zahintex Industries.
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