The securities regulator will hold a meeting with the representatives of 14 listed companies today to discuss the disbursement status of dividends declared by them.
These companies have failed to pay dividends in time.
Bangladesh Securities and Exchange Commission (BSEC) has asked the chairmen, managing directors and company secretaries of these companies to attend the meeting, according to BSEC spokesperson and executive director Mohammad Rezaul Karim.
They have been asked to bring relevant documents and place their proposals at the meeting to be held at the BSEC office.
The 14 companies are Lub-rref (Bangladesh) Limited, SK Trims & Industries Limited, Shepherd Industries PLC, VFS Thread Dyeing Limited, Fortune Shoes Limited, Associated Oxygen Limited, Desh Garments Ltd., Indo-Bangla Pharmaceuticals Limited, Beach Hatchery Ltd., Advent Pharma Limited, Khulna Power Company Limited, Libra Infusions Limited, Pacific Denims Limited and Union Insurance Company Limited.
As these companies failed to pay the dividends in time, they were downgraded to the 'junk' or 'Z' category last month.
Rezaul Karim said, "We are committed to ensuring investor safety and promoting good governance in the stock market. We are working to implement both short-term and mid-term plans, and we expect to see positive results soon."
Earlier In a major push to enforce compliance, BSEC gave an order to downgrade 27 listed companies to the 'Z' category, including these 14 companies, as half of them failed to declare any dividends for two consecutive years and the others did not complete the distribution of approved dividends.
According to the BSEC directive, a company will be transferred to 'Z' category if it fails to disburse at least 80 per cent of the declared dividend within the stipulated timeframe.
These companies declared nominal cash dividends between 2 per cent and 5 per cent for FY23.
But they failed to complete the distribution of the dividend within one month of holding AGM (annual general meeting). So, they were shifted to the 'Z' category.
Experts say that companies announcing dividends without properly assessing their capacity to make payouts have, in fact, deceived shareholders.
Investors make decisions about taking their positions in a company based on the record date following the dividend declaration. Companies that failed to complete dividend distributions have negatively impacted their price movements.
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