Listed firms asked again to deposit undistributed dividends

The Bangladesh Securities and Exchange Commission (BSEC) has ordered all listed companies to submit any undistributed dividends to the Capital Market Stabilisation Fund by March 31.

Undistributed dividends are a company's profits that have not been disbursed among its shareholders.

The BSEC passed a rule in June last year to form the fund using undistributed and unclaimed dividends of listed companies. The aim is to use the funds to safeguard the interests of the stock market and general investors.

The BSEC had sent several letters asking listed companies to submit their undistributed dividends. However, many issuers are yet to follow the order.

With this backdrop, the stock market regulator has sent another letter, saying companies that fail to submit the money within the stipulated time will be punished.

In previous letters, the BSEC had directed listed companies to transfer the cash and stock dividend or any fund or shares that remain undistributed, unsettled, unclaimed or non-refunded public subscription money to the Capital Market Stabilization Fund's bank account and beneficiary owners account.

However, it appears that some issuers are yet to complete the transfer of cash and shares in line with the provision of the commission's directive within the stipulated deadline.

So, the companies have been instructed to take necessary action to transfer the fund by March 31, failing which the commission will initiate appropriate measures for non-compliance of securities laws in this regard, including financial penalty, the letter said.

Prof Shibli Rubayat-Ul Islam said in a programme held last week that some listed companies are repeatedly seeking more time to submit their accounts on the undistributed dividends.

The BSEC chairman went on to say that the amount of undistributed profits accumulated by firms since their trading debut, and whether it is being used illegally needs to be sought out.

"We will appoint top class auditors if necessary to find out the real situation," he said.

"No one has the right to establish their own building with the money," Islam added.