ISN again comes under scanner of Dhaka bourse

The premier bourse plans to include Information Services Network (ISN) again to the list of firms whose performance will be reviewed because of their failure to announce any dividend in the last five years.

Earlier in August this year, the Dhaka Stock Exchange (DSE) decided to review the performance of 15 companies, including ISN.

On October 29, ISN had declared 5 percent dividend, leading the bourse to exempt the information technology entity from the review.

However, ISN cancelled the dividend in an annual general meeting on December 9 after finding that the dividend was declared without following regulatory rules.

In the meeting, the company informed its shareholders that there was a mistake in declaring the dividend and it was not intentional, said a participant of the AGM.

The company made some profit in the last financial year. Its earnings per share were Tk 0.48 on June 30, up from Tk 0.52 in the negative a year ago.

But the balance of ISN's retained earnings account was still in the negative, which barred the company to declare any dividend as per the rules of the Bangladesh Securities and Exchange Commission.

“So, ISN had to cancel the dividend, opening the scope for us to include it in the review list again,” said a top official of the DSE, requesting anonymity.

The official said they traced the companies abiding by the listing regulations, which say the stock exchange can delist any company if it fails to provide dividend for five consecutive years.

When asked why ISN was included in the review list despite making profits, the official said: “Only dividend declaration in the last five years was taken into consideration. It didn't matter whether it made profit or not in the previous years.”

“Now we will examine whether the profit shown in the last financial year is sustainable. If it has the potential to continue making profits and providing dividends, we will let it to do the trade again.”

Market insiders said investors incurred huge losses when ISN declared and later cancelled dividend.

ISN's stock rose 126.35 percent to Tk 43 on November 5 this year from Tk 19 on September 17. But it fell 34.88 percent to Tk 28.4 yesterday.

This correspondent tried to reach ISN officials over phone and email using the details given on the DSE website, but both were found to be invalid.