BSEC tightens dividend rules after finding nine listed firms in violation

The Bangladesh Securities and Exchange Commission (BSEC) decided to tighten compliance requirements for dividend payments by listed companies after identifying nine firms that failed to comply with existing rules.

At its 1,033rd commission meeting on Tuesday, the securities regulator decided to strengthen the requirements to ensure shareholders receive declared dividends within the stipulated timeframe, according to a press release.

“We have found nine firms that failed to comply with the rules. We will take action against them accordingly,” BSEC spokesperson and Executive Director Md Abul Kalam told Daily Waadaa.

The nine companies include five listed on the main board — Aftab Automobiles Limited, Navana CNG Limited, Fortunes Shoes Limited, Intraco Refueling Station Limited and Advent Pharma Limited — and four on the small and medium enterprise (SME) board: Master Feed Agrotec Ltd, Krishibid Seed Limited, BD Paints Limited and Krishibid Feed Limited.

Under the existing rules, listed companies must deposit declared cash dividends into a separate bank account and obtain a bank certificate confirming that the funds are available for distribution.

However, the regulator has found instances in which companies failed to deposit the required amounts or delayed payments to shareholders even after holding their annual general meetings (AGMs).

To address these violations, the BSEC has decided to introduce stricter requirements for companies seeking to place dividend matters before their AGMs, Abul Kalam said.

Under the proposed provision, a company that has not deposited the full declared dividend into a separate bank account, obtained the required bank certificate and secured the necessary signatures from its managing director, chief financial officer and company secretary will not be allowed to place the dividend matter before its AGM without submitting the required evidence.

In a separate decision, the BSEC has moved to simplify the appointment and reappointment process for independent directors.

Abul said an independent director who had previously received an exemption would not need to apply for the same exemption again when seeking reappointment. In such cases, the latest Credit Information Bureau (CIB) report from Bangladesh Bank would be sufficient, he added.

The measure is intended to reduce procedural requirements for reappointments while retaining the necessary checks on candidates.