Shurwid Industries share takes hit

Shares of Shurwid Industries Limited, a disposable plastic and PVC products manufacturer, fell prey to selling pressure after the securities regulator decided to sue its board of directors due to the failure in dividend payout.

Its share price dropped 8 per cent to Tk 18.5 on the Dhaka Stock Exchange on Tuesday, extending its losing streak for the fourth consecutive session. The company was the fourth worst loser of the day. In four sessions, it lost nearly 21 per cent.

On Sunday, the Bangladesh Securities and Exchange Commission (BSEC) decided to file a case against the board of directors of the company as it failed to distribute dividends to its shareholders even after deceleration.

The decision was taken after an investigation in response to the pile of complaints from investors that they did not receive dividends from the company.

The company had recommended a 10 per cent cash dividend for the year ended on June 30, 2019, in an attempt to jack up its share prices.

Later, it wrote to the regulator that it had disbursed dividends to all of its shareholders, which was an utter lie, beguiling the investors.

To check the complaints, the BSEC formed an inquiry committee to investigate and found the truth.

In July last year, the regulator had frozen the beneficiary owners (BO) accounts of sponsor-directors of Shurwid Industries.

It also instructed the Central Depository of Bangladesh and depository participants to freeze all types of securities directly or indirectly held by the company's sponsors shareholders, directors, chief financial officer, and company secretary until further order.

The commission also ordered the Dhaka Stock Exchange to probe into the allegations against Shurwid Industries.

Listed in 2014, the company got IPO approval from the regulator to raise Tk 14 crore using the fixed price method. It raised the funds for factory building expansion, machinery and gas generator purchases, and bank loan repayment.

Shurwid Industries Ltd was incorporated in Bangladesh in March 2004 as a private limited company and started its commercial operation in May 2008. Subsequently, the company was converted into a public limited company in March 2010.