BSEC body to examine undistributed funds in listed firms

The stock market regulator has recently formed a committee to prepare a report on unclaimed dividends, bonus shares, cash dividends and unutilised funds collected by listed companies through initial public offerings (IPOs).

Besides, the Bangladesh Securities and Exchange Commission (BSEC) wants to know about employees' gratuity funds in the companies.

BSEC Commissioner Md Abdul Halim will head the five-member committee, with Deputy Director Mohammed Nazrul Islam as its member secretary.  

Commissioner Dr Shaikh Shamsuddin Ahmed, Professor Dr Md Mizanur Rahman, Executive Director Md Saifur Rahman are the other members of the committee.       

BSEC Chairman Shibli Rubayat-Ul-Islam said thousands of crore of taka remains idle in the listed companies for years.

He said that the listed companies have sought another seven days to provide the information to the committee.

It will scrutinise all the information and find the ways of better utilisation of the funds and the related rules will be amended after supervision, he added.

Meanwhile, the Dhaka Stock Exchange has asked the listed companies to submit information about their undistributed and unclaimed cash and stock dividends, and unsettled securities held in different Beneficiary Owner (BO) accounts.

Sources said the regulator has already started work in this regard. Now the commission will find ways on how to better utilise the funds.

Most of the listed companies have a big amount of unclaimed dividends, which the companies have been holding for years.

Besides, there are a dozen companies that have already delayed using their IPO funds.

The companies make delays by citing numerous excuses and get approvals from their general shareholders. As a result, investors are not receiving an expected dividend from those companies, added sources.

Most of the companies use Bangladesh Electronic Funds Transfer Network (BEFTN), but they did not use this system 100% while distributing dividends.

As a result, a big amount of cash dividend got back to the company and turned into unclaimed dividends.

The BSEC wants to increase the use of BEFTN to 100% of the interest of investors.

Olympic Industries Ltd has been paying dividends to investors since 1988. Its unclaimed dividend stands at 20.57 crore, according to the latest financial report of the company.

Padma Oil, Jamuna Oil, and Meghna Petroleum, three state-owned petroleum companies, have an unclaimed dividend of around Tk27 crore, according to the companies' annual statements since 2006.

The Power Grid Company of Bangladesh has an unclaimed dividend of around Tk3 crore, while the Investment Corporation of Bangladesh (ICB) has shown Tk21.08 core in its undistributed profit.

British American Tobacco has an unclaimed dividend of around Tk5 crore.

If the companies send the dividend to investors through BEFTN or approved online systems of the Bangladesh Bank, then the amount of unclaimed dividends will not increase further, sources said.