Bourses asked to explain Modern Dyeing delisting
The stock market regulator has sought explanations from both stock exchanges of the country about the delisting and postponement of share trading of Modern Dyeing and Screen-Printing Ltd.
The Bangladesh Securities and Exchange Commission (BSEC) issued letters to the bourses in this regard last week upon applications by some investors.
Incorporated in 1981, Modern Dyeing and Screen-Printing Limited engaged in woven dyeing, printing, and finishing of all types of clothes. The company was listed on the Dhaka Stock Exchange in 1988.
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The commission has asked for a brief detail about the company including its shareholdings, a list of sponsors and directors, financial position, and other information.
The bourses will provide information on the present condition of the company, and the reason for delisting and postponing their trading.
The regulator also sought to know whether stock exchanges have any comprehensive procedure for non-voluntary delisting defining the responsibilities of the exchanges to protect the interest of investors.
BSEC has further wanted to know if the bourses have any necessary regulatory provisions before de-listing listed securities from any trading board of the exchanges. Whether stock exchanges initiated any actions against the issuer company and its directors and management with regard to any deficiency.
In July 2018, the board of directors of the Dhaka Stock Exchange decided to delist the firm from the exchange's all boards.
According to the financial statement of 2015-16, the company is closed since December 2010.
The firm closed its operation due to a lack of low gas pressure and failure to get an environment clearance certificate from the government for running the factory.
Besides, it also blamed the low efficiency of its ageing textile dyeing, printing, and finishing machinery for closing the operation.
The factory premises have been given a lease on a rental basis in Tejgaon Industrial Area as per the annual general meeting decision.
During the year, the company made income as the rent of Tk69 lakh and made a net profit of Tk20.43 lakh.
After delisting from the stock exchange, general shareholders fall into a trap and suffer from holding the shares for a long time.
The investors could not be able to sell shares till now as the firm has been delisted from all types of platforms on the stock exchanges.
Sponsors and directors jointly held 65% shares, while general investors and others held the rest of the amount.
As per the annual report of 2015-16, its paid-up capital is Tk1.37 crore.
During the year, its total assets stood at Tk3.62 crore and its total liabilities were Tk1.98 crore.
The company recommended an 8% cash dividend for its investors during the year.
The last share price of the company on the Dhaka Stock Exchange was Tk326.90. The share price increased from Tk425 to 190 within a month.
