20 companies fail to comply with listing regulations

TBS Infograph

Twenty companies have become non-compliant to listing regulations through their failure to hold an annual general meeting (AGM) and make a corporate declaration.

Fiscal 2019-20 has ended more than one year ago, but the companies are yet to come up with declarations of their financials and dividends for their shareholders.  

As a result, the shareholders remain in the dark about returns from their investment in these companies.

Currently, 341 companies are listed on the capital market of the country.

"If shareholders do not get returns from investment, they will not come to the stock market. As a result, the market will get smaller," Professor Shibli Rubayat-Ul-Islam, chairman of the Bangladesh Securities and Exchange Commission (BSEC), said at a programme recently.

"The commission is now working on it so that shareholders get returns."  

According to data available with the Dhaka Stock Exchange (DSE), the highest number of non-compliant securities are from the textile sector.

Fifty-eight textile companies are listed on the country's stock exchanges and eight of them have failed to make any corporate declaration and hold their AGMs for FY20.

Of the other non-compliant companies, one each from the miscellaneous, jute, and insurance sectors, two each from the NBFI, Food and Allied and engineering, and three are from the pharmaceutical and chemical sector.

Some of the listed companies maintain the July-June fiscal year while others follow the January-December calendar year.

As per listing regulations of 2015, a listed company gets 120 days to prepare an audited annual report and a corporate declaration after the year-end, and they have to hold their AGMs 45 days after the record date.

Among the 20 non-compliant companies, only two have come up with their annual corporate declarations as per the data available with the premier bourse.

Of the companies, five held their AGMs for the last time in FY16, three in FY17, six in FY18, and six others in FY19.

In these fiscal years, eight of the companies have not declared dividends while eleven others have paid cash and stock dividends to their shareholders.

Textile companies in trouble

When the textiles companies raised capital by issuing shares in the stock market, their financials and business were good.

Over the years, due to a lack of efficiency and a decrease in demand for their products, some of the companies are facing challenges to run business.

To add to their woes, the Covid-19 pandemic has badly affected the business of these companies. As a result, some of them have been forced to shutter down.

To tackle the Covid-19 pandemic situation, the factory of Tallu Spinning Mills was shut down from 14 April 2020 to 22 August 2021.

The company, which had held its last AGM in FY2018, has returned to production after hiatus of more than a year.  

Mithun Knitting and Dyeing said its factory is out of operation as the Bangladesh Export Processing Zones Authority (Bepza) has suspended the lease agreement with the company.

The company said the annual accounts for FY19 and FY20 are under the process of auditing and it will file an appeal with the High Court seeking permission to hold the pending AGMs.

Ring Shine Textiles has been passing through a bad time during the pandemic due to lower demand for its products from foreign buyers. Now, its factory is running partially after a shutdown.

Alif Industries and Alif Manufacturing Company held their AGM for the last time in FY19.

Delta Spinners arranged its last AGM in FY17 while Tung Hai Knitting and Dyeing, and C&A Textiles in FY16.

But there is no information about holding the AGM for FY20.

Two NBFIs and one insurance also fail

Out of 23 listed non-bank financial institutions on the stock market, Bangladesh Industrial Finance Company and Peoples Leasing and Finance Services failed to hold their AGMs although eight and a half months of 2021 has passed.

Peoples Leasing's share trading remains halted due to a loan scam, and the suspension saw several extensions.

The non-bank financial institutions (NBIFs) held their AGMs for the last time in 2017.

Delta Life Insurance also failed to arrange an annual general meeting and announce corporate declaration for their shareholders.

The last time, Delta Life Insurance held its AMG was in 2018.

The three companies maintain the January-December calendar year.

Savar Refractories from the miscellaneous sector and Iman Button, Ambee Pharmaceuticals and Active Fine Chemicals from the pharmaceutical and chemical sector, Appolo Ispat Complex and Shurwid Industries, and Jute Spinners from the jute sector have failed to announce their corporate declarations for FY20 and hold their AGMs.

The newly listed Energypac Power Generation and Lub-reff (Bangladesh) have also failed to hold their AGMs.