The Capital Market Stabilisation Fund (CMSF) will conduct audits of 50 non-compliant listed securities to realise undistributed or unclaimed dividends amounting to Tk 63 billion.
In doing so, an audit panel will be formed with four firms by early May through a competitive bidding.
The money will be obtained from the companies through a friendly approach, said CMSF Chairman Md. Nojibur Rahman.
"We hope the companies will facilitate the execution of our plan to ensure the settlement of dividends that are long due," he said.
The list of the 50 companies to be audited in the first phase includes some large-cap firms having good reputation.
The other listed companies will be audited gradually to determine the exact amount of undistributed dividends.
According to an initial estimate done by the CMSF, the amounts of unclaimed dividends of the 50 companies are between Tk 1 million and Tk 42 billion. Those are in forms of cash and stock dividends.
Meanwhile, the move prompted three companies -- Square Pharmaceuticals, Social Islami Bank Ltd. (SIBL) and Tamij Uddin Textile Mills -- to rush to deposit undistributed dividends into the fund.
The securities regulator in June 2021 issued rules for the CMSF to settle investors' claims for dividends, and inject money from undistributed or unsettled dividends into the market.
Before issuing the rules, undistributed dividends were estimated at around Tk 210 billion.
Responses from the companies to the obligation of depositing undistributed dividends into the Market Stabilisation Fund were not satisfactory.
As of March this year, the CMSF received undistributed cash dividends of Tk 5.15 billion and stock dividends of Tk 6.5 billion as per the market price.
It has settled investors' claims worth Tk 500 million.
The CMSF also injected Tk 2.25 billion into the capital market through the Investment Corporation of Bangladesh (ICB) and contributed Tk 500 million as sponsor of the ICB AMCL CMSF Golden Jubilee Mutual Fund.
A few months back, the securities regulator decided to gauge undistributed dividends held with the issuers.
Finally, it asked the CMSF on April 18 to submit the list of interested auditors.
As per the instruction given, the CMSF will send a list of auditors to the Bangladesh Securities and Exchange Commission (BSEC) within May 3.
The regulator will form the audit panel upon scrutiny.
The auditors will examine, review and report the status of rights issues and cash and stock dividends that have been unpaid or unclaimed or unsettled or un-allotted for a period of three years from the date of declaration or record date.
They will also look into the Initial Public Offering (IPO) transfer process and find out whether any non-refunded money remains in the hands of issuer companies. Such funds will have to be transferred to the account of the CMSF.
All transactions from the BO (beneficiary owner's) accounts of the issuers maintained for the purpose of disbursing bonus shares, rights shares or any other purpose will also be examined.
The audits will also entail examinations of bank interests accrued on unclaimed cash dividends, of IPO subscription money, or rights share subscription money as well as dividends and interests pending in foreign currency.
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