BSEC to ensure proper distribution of dividends
The Bangladesh Securities and Exchange Commission (BSEC) has ordered issuers to maintain detailed information on shareholders in a bid to ensure the proper distribution and utilisation of dividends.
This includes information on a shareholder's BO account and bank account as well as their mobile phone number, email and home address.
The information must be updated at least once a year, according to the BSEC order issued recently.
The Central Depository of Bangladesh will provide such information to the issuer for the purpose of proper distribution of cash or stock dividends, it said. At present, undisbursed dividends amounting to around Tk 21,000 crore remains idle in the accounts of listed companies.
Prof Shibli Rubayat Ul Islam, chairman of the BSEC, recently said the amount would be given to the Investment Corporation of Bangladesh (ICB) as a stabilizing fund.
"If the owners don't claim the money then it will be used for fund management," he added. The BSEC also issued a directive saying that issuers should have a dividend distribution policy and it should be disclosed in the company's annual report or official website.
The listed companies shall pay off the annual or final dividend within 30 days of approval. Within ten days of declaration of cash dividends, an amount equivalent to the declared dividend payable for the concerned year shall be kept in a separate bank account dedicated for this purpose.
It should be paid off directly to the bank account of the entitled shareholders as available in the BO account maintained with the depository participant.
The listed companies, upon receiving the claim on cash dividend from a stock broker or merchant bank for the margin client who has debit balance or margin loan, shall be paid to the consolidated customers' bank account of the stock broker or separate bank account of the merchant bank.
They should inform shareholders through a text message or email immediately after any disbursement of cash dividends, Islam added.
Prof Abu Ahmed, a stock market analyst, said unclaimed dividends should be open for their owners so that whenever they want to get the money back, they can.
"At first, a huge advertisement should be published to seek the shareholders who did not claim the dividends," he said, adding that the fund should be available on demand.
"Many families do not even know that their guardians bought shares before their demise so dividends remain unclaimed," said Ahmed, former chairman of the economics department at the University of Dhaka.
"We want to see that companies are disbursing dividends properly and timely so we issued the order," said a top official of the BSEC preferring anonymity.
"Even after that, if dividends remain unclaimed, we want to use it properly. So, the fund would be given to a fund manager." he said.
However, a top official of an asset management company said the fund should not be given to the ICB alone.
Some of the fund should be given to private fund managers on the basis of their performance as it would ensure proper utilization of the fund, he added.
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