The Bangladesh Securities and Exchange Commission (BSEC) has ordered the board of directors of First Finance Limited to reconstitute its board by appointing five independent directors nominated by the regulator.
The regulatory order came this week in the backdrop of the company's failure to reconstitute the board within 45 working days of its placement in the 'Z' category.
Despite being traded under the 'Z' category since May 2, 2016, the company with negative equity did not reconstitute its board.
As per the regulatory order, Major General (Retired) Abul Kalam Mohammad Humayun Kabir, Khandoker Nizamuddin, Mohammad Rafiqul Islam Rowly, Prof Mohammad Shofiqul Islam and Dr Qazi Moinuddin Mahmud will be appointed as independent directors of First Finance.
The company's chairman, directors and the managing director have been asked to execute the regulatory order in this regard.
Besides, both stock exchanges will have to monitor every phase of activities of the issuer company and report the matter to the commission in due course.
The accumulated loss of the non-performing First Finance stands at Tk 3.25 billion, resulting in the total shareholders' equity becoming a negative value worth Tk 1.69 billion.
The company declared a 2 per cent stock dividend for fiscal 2019 in breach of the rules and regulations.
Besides, several other irregularities and instances of non-compliance have negative implications for investors - undermining their trust and confidence, potentially leading to financial losses and diminishing the reputation of the company.
First Finance was listed on the bourses in 2003.
As of June 30, 2023, its sponsor-directors hold 41.31 per cent of shares, institutes hold 19.38 per cent and general investors hold 39.31 per cent.
According to the latest disclosure, the company's loss stood at Tk 1.54 per share for July-September 2022, compared to a loss of Tk 6.34 per share for July-September 2021.
mufazzal.fe@gmail.com