Six cos to face penalties for missing deadline to pay dividends

Directors of six listed companies will face penalties for missing the deadline given by the securities regulator to distribute approved dividends to their shareholders.
Five weeks earlier, the Bangladesh Securities and Exchange Commission (BSEC) set a new deadline -- December 15 -- for nine companies to complete the disbursement of dividends.
To protect investors' interests and uphold the integrity of the capital market, the new commission decided to impose fines over defaults and matters of non-compliance with securities laws.
Failure to meet the deadline would result in significant penalties slammed on the companies' directors, said the stock market watchdog earlier.
The companies to be penalized are Lub-rref (Bangladesh), Safko Spinning Mills, Pacific Denims, BD Paints, Krishibid Feed, and Krishibid Seed.
"The securities regulator is working for the development of the capital market and will not tolerate non-compliance in a bid to restore investors' confidence," said Mohammad Rezaul Karim, BSEC executive director and spokesperson.
As per the regulatory decision, each director of Lub-rref (Bangladesh) will have to pay Tk 23.5 million in fine, the highest penalty among the non-compliant firms, as it failed to disburse 2 per cent cash dividends approved for FY23.
Bangladesh Paints' directors will face a penalty of Tk 9.7 million each for failure to pay 10 per cent cash dividends for FY23.
Each director of Safko Spinning has to pay a fine worth Tk 2 million for not clearing 2 per cent cash dividend payments for FY22 within the new deadline. The company declared no dividend for FY23 and FY24.
Pacific Denims' directors also faced a fine of Tk 1.3 million each as the company failed to disburse 1 percent cash dividends for FY23.
Directors of Krishibid Feed and Krishibid Seed faced a penalty of Tk 1 million each as they failed to comply with the regulatory directive. Krishibid Feed failed to pay 10 per cent cash and Krishibid Seed failed to disburse 5 per cent cash dividends approved for FY23.
Directors of these companies, excluding independent directors, will be required to pay a fine from their own accounts. If the default continues, directors, including managing directors, will have to Tk 10,000 as penalty for every day.
BSEC tough on errant companies
In a major drive to enforce compliance, the stock market regulator is going tough on errant companies and their directors.
As part of the move, the securities regulator asked the top brass of Confidence Cement to appear at the BSEC on December 8, which was downgraded to 'Z' category on December 4 for failure to pay 10 per cent cash dividends for FY24 within a month after holding the annual general meeting.
However, the company paid off dividends on December 8 and got out of the list of junk stocks.
Two months ago, some 28 listed companies were labelled as junk stocks. Of them, 14 were sent to the 'Z' category as they had failed to complete the distribution of approved dividends.
According to listing regulations, companies are required to disburse declared or approved cash dividends within 30 days of approval at their annual general meeting (AGM).
The BSEC spokesperson said the regulator would gradually sit with non-compliant companies that had recently been transferred to 'Z' category.
"If their responses are not satisfactory, the regulator will take action as per the securities rules," said Mr Karim.
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