Listed companies will soon be barred from placing dividend proposals before shareholders unless they submit a bank certificate, signed by top management officials, proving the total sum already deposited in a designated bank account.
The Bangladesh Securities and Exchange Commission (BSEC) decided on Tuesday to amend its existing dividend rules after nine companies failed to fully fund and distribute dividends declared for the financial year ended 30 June 2025.
The commission also decided to begin enforcement proceedings against the nine companies, five of which have yet to distribute any dividend while four have made only partial payments.
of them could show funds in the dividend accounts.
Under the existing rules, a company declaring an annual or final cash dividend must transfer the full amount required for distribution to a separate bank account at least one day before its annual general meeting (AGM).
It must obtain a certificate of deposit from the bank, authenticated by the managing director, chief financial officer and company secretary, and present it at the AGM as well as submit it to the stock exchanges.
The proposed amendment would tighten that sequence further: no dividend-related agenda could be placed before an AGM unless the bank certificate has been accepted by the stock exchanges and subsequently presented to the AGM.
That would prevent companies from seeking shareholder approval for dividends before demonstrating that they have the cash to pay them.
The decision was taken at BSEC’s 1,033rd meeting, chaired by its Chairman Masud Khan, according to a post-meeting press release.
Five of the nine companies are listed on the Dhaka Stock Exchange’s main board – Aftab Automobiles, Navana CNG, Fortune Shoes, Intraco Refueling Station and Advent Pharma.
The four SME-board companies are Master Feed Agrotec, Krishibid Seed, BD Paints and Krishibid Feed.
A DSE report showed Aftab Automobiles had distributed 14.11 per cent of its dividend, Navana CNG 18.19 per cent, Advent Pharma 50.22 per cent and Master Feed Agrotec 26.19 per cent.
The other five had made no dividend payment.
BSEC said the nine companies had not properly complied with the existing requirement to fully set aside dividend funds.
BSEC Executive Director and Spokesperson Abul Kalam told TIMES the cases would now go to the commission’s enforcement division, which would hold hearings before taking action under securities laws and regulations.
At the same meeting, BSEC also decided to simplify the appointment and reappointment of independent directors under the Corporate Governance Code, 2018 and subsequent amendments.
The commission will be able to consent to the reappointment of an existing independent director subject to receiving an updated clean Credit Information Bureau (CIB) report from Bangladesh Bank.
It will help the listed companies’ universe get rid of loan defaulters in the board of directors.
BSEC also decided that an exemption previously granted from specified qualification or experience requirements would remain valid for a fresh appointment at another listed company or a reappointment at the same company.
That means the individual would not need to seek the same exemption again.
Abul Kalam said the change does not remove the eligibility requirements generally and applies only where the commission has already granted the relevant exemption.
