Seventeen listed companies have failed to pay the dividends they had declared, despite most of their deadlines having passed eight to nine months ago.
The companies were required to distribute the dividends within 30 days of approval at their Annual General Meetings (AGMs) for the fiscal year 2024.
According to initial figures from the Dhaka Stock Exchange (DSE), the total unpaid dividends amount to Tk 73.35 crore. Of this, 11 companies listed on the main board have Tk 65.48 crore in unpaid dividends, while six companies from the SME Board have Tk 7.87 crore in undistributed dividends.
On September 17, the DSE sent a letter to the Chairman of the Bangladesh Securities and Exchange Commission (BSEC), Khondker Rashed Maqsood, notifying him of the issue. Initially, the letter mentioned 21 companies, of which four have since completed their dividend distribution.
SME Board company Krishibid Feed’s stock dividend plan was not approved by the regulator.
Under BSEC regulations, companies must distribute dividends within 30 days of AGM approval. Regulatory officials met with representatives from the non-compliant companies in April to discuss the delays. However, aside from being downgraded to the punitive ‘Z’ category on the bourses, the companies and their directors have faced no further action from the BSEC.
Most investors feel that downgrading firms to the ‘Z’ category is more of a punishment for the companies themselves, rather than holding accountable the individuals responsible for the failure.
The four companies that initially failed to distribute dividends within the timeline but later succeeded are RAK Ceramics, Sea Pearl, Navana CNG, and Genex Infosys. Nine companies failed to distribute any dividends at all, including Lub-reff, Orion Pharma, Fortune Shoes, Alif Manufacturing, SK Trims, Aamra Technologies, Saif Powertec, Aamra Network, and SS Steel. On the other hand, Aftab Auto and Advent Pharma partially cleared their payable dividends.
From the SME board, Oryza Agro, BD Paints, and Mostafa Metal have yet to pay any dividends, while Himadri, Bengal Biscuite, and Master Feed Agro have cleared some of their declared dividends.
TIMES of Bangladesh spoke to several companies, and most cited financial hardship, particularly cash flow issues, as the reason for their failure to distribute dividends.
Saif Powertec’s Chief Financial Officer (CFO), Hasan Reza, said, “The company failed to pay dividends due to severe business losses, but arrangements for distribution will be made soon.”
SS Steel’s Company Secretary, Abul Kalam, also attributed the failure to financial struggles but expressed the company’s plan to clear the unpaid dividends by the end of the year.
BSEC Director and Spokesperson Abul Kalam confirmed that the regulatory process to hold the companies and their key people accountable for the failure is underway.
