In a major drive to enforce compliance, the stock market regulator is going tough on errant companies that failed to complete the distribution of approved dividends within the stipulated time.
As part of the move, the Bangladesh Securities and Exchange Commission (BSEC) will hold a meeting with the top brass of Confidence Cement, which was downgraded to 'Z' category on Tuesday.
The regulator asked Zahir Uddin Ahmed, managing director; Newaz Mohammed Iqbal Yousuf, chief financial officer, and Md Delowar Hossain, company secretary of Confidence Cement, to attend the meeting at the BSEC on December 8, according to a statement issued on Wednesday.
"The commission will want to know why the company failed to complete the distribution of approved cash dividends within the given time," said Mohammad Rezaul Karim, spokesperson and an executive director of the BSEC.
When asked by The FE, company secretary of Confidence Cement Md Delowar Hossain said they completed disbursement of 10 per cent cash dividends to shareholders for FY24 on Wednesday, two days after the deadline.
Mr Hossain said the company officials would attend the BSEC meeting scheduled for December 8.
The BSEC spokesperson said the regulator would gradually sit with other 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.
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.
The companies are Advent Pharmaceuticals, Desh Garments, Beach Hatchery, Indo-Bangla Pharma, Associated Oxygen, Khulna Power, Pacific Denims, Fortune Shoes, Energypac Power Generation, VFS Thread Dyeing, Shepherd Industries, SK Trims, Lub-rref (Bangladesh) and Libra Infusion.
Of them, Advent Pharmaceuticals, Desh Garments, Beach Hatchery, Energypac Power Generation, and Shepherd Industries paid off dividends recently and got out of the list of junk stocks.
Many of the 14 companies declared nominal cash dividends -- between 2 per cent and 5 per cent for FY23.
But they could not distribute 80 per cent of the declared dividends within a month after holding the AGM (annual general meeting), a requirement to avoid the transfer to Z category.
Currently, the number of 'Z' category companies is 87 on the Dhaka Stock Exchange.
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