BSEC to appoint auditor for Fareast Finance | The Daily Star
12:00 AM, May 04, 2021 / LAST MODIFIED: 01:34 AM, May 04, 2021

BSEC to appoint auditor for Fareast Finance

Rules framed to utilise Tk 21,000cr capital market stabilisation fund

The Bangladesh Securities and Exchange Commission (BSEC) will appoint a special auditor for Fareast Finance and Investments to investigate the company's financial situation.

The stock market regulator took this decision during a commission meeting yesterday.

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Fareast Finance, a listed non-bank financial institution, has failed to provide any dividends to investors since 2017 due to considerable losses.

The company's reserve stands at Tk 117 crore in the negative while its paid-up capital is Tk 164 crore, data from the Dhaka Stock Exchange (DSE) shows.

After its trading debut in 2013, Fareast Finance has so far provided only 15 per cent cash dividends and 2.5 per cent stock dividends.

But as the company's history of poor performance since then has ultimately impacted its investors, the stock market regulator decided to initiate a special audit, according to a top BSEC official.

It was also decided during the commission meeting that foreign investors would be allowed to sponsor any mutual fund.

Mutual funds pool money from investors and channel it into securities such as stocks, bonds and other assets. Once profits are logged, the fund manager disburses it among the unit holders.

In addition, the BSEC approved the Bangladesh Securities and Exchange Commission (capital market stabilisation fund) Rules, 2021.

After considering the stakeholders' opinions, the rules have been approved and will soon be published as a gazette.

The BSEC decided in January to create a Capital Market Stabilisation Fund worth more than Tk 21,000 crore with unclaimed dividends of listed companies.

As per data of Dhaka and Chittagong stock exchanges, 335 listed companies have unclaimed cash dividends worth Tk 956 crore and unclaimed or unsettled stock dividends worth Tk 19,986 crore.

The new rules have been formed to utilise the fund.   

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