Regulator serves notice on Familytex for breach of rules

Bangladesh Securities and Exchange Commission on Sunday served notice on Familytex BD, a listed company, for violating securities rules by declaring dividends before time.
The company was also asked to give reply to the notice in three workdays.
The securities regulator approved the initial public offering of the company on January 22 this year on condition that it does not declare dividends for 2012 prior to the completion of listing on the bourses.
The Chittagong-based export-oriented company raised Tk 34 crore through IPO.
The BSEC also applied its special power act, 2CC in the IPO approval process.
But, the company declared zero dividend for the shareholders on April 29 this year before getting the listing approval at Dhaka Stock Exchange on June 12 and at Chittagong Stock Exchange on June 2.
On Sunday, the company was placed in Z category from the existing N, as it failed to comply with dividend announcement regulation, according to the DSE website.
The DSE requested stockbrokers and merchant bankers not to provide loan facilities to purchase securities of the company as it is placed in Z category.
“The company clearly violated the rules, which prompted us to serve notice on it,” said Saifur Rahman, executive director of BSEC.
“We are looking into the matter.”
During the IPO process, Abdul Kader Faruk served the company as chairman.
Faruk was also the managing director of RN Spinning Mills and was suspended by the securities regulator on fraud charges in October last year, as the company provided false documents to the securities regulator.
The commission also filed a criminal case with Motijheel Police Station against the directors, managing director and company secretary of RN Spinning Mills.
During the IPO, Faruk resigned from chairmanship of Familytex to keep the IPO approval process smooth.
The paid-up capital of the company was Tk 6 crore in 2010, and 105 crore in 2011, with earnings per share of Tk 0.92, which was Tk 4.92 while applying for the IPO approval.

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