DSE to visit 42 cos to expose their true worth to investors

The Dhaka Stock Exchange (DSE) has separated out 42 companies for inspection of physical entities for their failure to meet one or more obligations - holding annual general meetings, giving out dividends as declared, or paying listing fees.
Inspections will be carried out in phases. In the first phase, 14 companies will be paid visit to by the DSE. The bourse has already received an approval from the Bangladesh Securities and Exchange Commission (BSEC) in this regard.
"The aim is to expose real scenario of the companies to investors," said Mohammad Rezaul Karim, spokesperson of the BSEC.
Some companies have not been in operation but they refrained from making any disclosure to inform their shareholders, he said.
Mr Karim also revealed that the DSE had decided to carry out inspections in phases due to a shortage of skilled manpower.
DSE acting managing director M Shaifur Rahman Mazumdar could not tell the exact time to be taken to complete the first round of inspections.
"It may take around one and a half months," he said.
The 14 companies are National Feed Mills, Fortune Shoes, Central Pharmaceuticals, CVO Petrochemical Refinery, Dulamia Cotton Spinning Mills, Family Tex (BD), Keya Cosmetics, Khan Brother PP Woven Bag Industries, Northern Jute Manufacturing Company, Regent Textile Mills, The Dacca Dyeing and Manufacturing Company, Usmania Glass Sheet Factory, Zaheen Spinning, and Zaheen Tex Industries.
Some of these non-compliant companies exhibited rally not supported by their financial performance.
For example, Khan Brothers PP Woven Bag Industries saw a 293 per cent price surge on the bourse to Tk 38.9 between April 17 and July 18. The stock then fell to Tk 32.5 by Thursday.
The company recommended only 2 per cent cash dividend for FY22, having incurred losses for three years since FY20. The losses per shares hovered between Tk 0.09 and Tk 0.18.
Similarly, Northern Jute Manufacturing Company showed an abnormal price hike of 69 per cent to Tk 336.7 between May 18 and June 4. The stock, however, experienced corrections and plunged to Tk 218.40 by August 3.
The company distributed 5 per cent cash dividend for FY20. But there is no financial disclosure of it on the DSE website for FY21 and FY22.
Representatives of the regulatory bodies said many of the 42 companies had become non-compliant soon after their listing in the market.
DSE officials said they were doubtful about the authenticity of the corporate disclosures by some of the companies and their shareholding status. The premier bourse seeks to find out the stakes of their sponsor-directors.
Some of the companies have not paid out dividends even after approval of the proposals in the annual general meetings.
Fortune Shoes is one of those.
On possible measures against issues of non-compliance, BSEC spokesperson Mr. Karim said the regulator might impose fines or even take legal actions, among other measures, based on the extent of rules violation.
The regulator may also reconstitute the board of a non-compliant company, he added.

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