Home ›› 14 Jun 2023 ›› Stock
The Dhaka Stock Exchange (DSE) has penalised three listed companies – SS Steel, Oimex Electrode, and Information Services Network Limited – for their delayed dividend disbursements for the year ending June 30, 2022.
The authorities of the prime bourse has fined SS Steel Tk 1.45 lakh, Oimex Electrode Tk 1.15 lakh, and Information Services Network Tk 1.75 lakh for over their alleged breach of securities laws concerning the dividend disbursement.
A listed company, as per the DSE’s listing regulations as well as securities laws, is required to distribute the dividend within 30 days after getting approval at its annual general meeting (AGM).
The three companies were required to give the annual dividend by April this year, but they did not do that, a clear breach of DSE Regulations, and the securities laws.
As per rules, any listed company that defaults in complying with the provision of the sub-regulation (1) will jointly and severally be liable to pay to the Exchange a penalty of Tk 5,000 for every day the default continues.
A source at the DSE with knowledge of the matter said the bourse this month served separate letters to the three companies over the issue.
As per the letter, the DSE asked Information Services Network to clarify its stand about the aforesaid non-compliance with securities laws along with the payment of a penalty amounting to Tk 1.75 lakh in favour of the DSE for the late disbursement of an approved dividend.
The company was asked to pay the fine within three days after it received the letter.
Information Services Network declared a 3 per cent cash dividend for the year ending on June 30, 2022. The company also reported earnings (EPS) of Tk 0.59 for the same year, against a loss per share of Tk 8.45 for the previous year.
On the other hand, the Dhaka bourse in the letter to SS Steel Limited said your company was required to disburse the annual dividend by April 29, 2023, but you had paid that at the delayed date of May 29, 2023, a clear breach of the DSE regulations and BSEC directives.
The Dhaka bourse asked the company to clarify its position regarding the aforesaid non-compliance with securities laws, while it also asked the company to pay a penalty of Tk 1.45 lakh in favour of the DSE for that non-compliance.
When contacted, Mostafizur Rahman, company secretary at SS Steel told The Business Post, “We tried to disburse the declared cash dividend in time, but we had to resend dividends to many shareholders’ accounts. That was because we took additional time to complete the overall disbursement process.
SS Steel declared a 2 per cent cash dividend only for its general shareholders and an 8 per cent stock for all for the financial year 2021–22 that ended on June 30.
Its earnings per share for the fiscal 2021-22 were Tk 1.87, down 19 per cent than that of the previous fiscal.
In a same manner, Oimex Electrode was required to disburse the annual dividend by April 29, 2023 but it had paid it on May 22, 2023.
The DSE sought a clarification from the company about the aforesaid non-compliance with securities laws. Besides, the bourse also asked it to pay a penalty of Tk 1.15 lakh to the DSE.
Oimex Electrode had declared a 1 per cent cash dividend for its shareholders, other than sponsors and directors, for the fiscal year 2021–22.
The sponsors and directors hold 20,133,184 shares out of a total of 67,084,781 shares of the company.
Oimex Electrode is a manufacturer of welding electrodes, galvanized iron wire, copper-coated welding wire, and iron nails.
