As part of an ongoing effort to clean up the main trading board, the Dhaka Stock Exchange (DSE) is going to inspect the operational status and business activities of four more non-performing and poorly performing companies on its list of 30 companies.
Bangladesh Securities and Exchange Commission (BSEC) has recently given permission to the premier bourse to visit ICB Islamic Bank, Information Services Network, United Airways, and Beach Hatchery so as to inspect their operational performance and other organisational activities.
Each of these four companies have one or more of the following problems: inability to pay dividends, inability to hold annual general meeting, and not being in operation. Consequentially, they are listed as Z-category companies in the stock exchange. The DSE sought approval to inspect the four companies as early as in mid-July.
Since the beginning of this year, the DSE has been in the process of inspecting 15 companies. Among these 15 companies, inspection of 13 has already been completed; these companies are: Meghna Pet Industries, Meghna Condensed Milk Industries, Imam Button, Kay and Que, Savar Refractories, Dulamia Cotton Spinning Mills, Samata Leather Complex, Shyampur Sugar Mills, Zeal Bangla Sugar Mills, Beximco Synthetics, Jute Spinners, Shinepukur Ceramics, and Sonargaon Textiles. Inspection of ICB Islami Bank and ISN Limited, the remaining two companies, is yet to get completed.
These companies have not paid any dividends – either in cash or stock – to their shareholders for five years.
Later, the DSE added 15 more companies to its list for inspection. Among these, it has already got BSEC’s nod for inspecting United Airways and Beatch Hatchery. DSE officials informed The Business Standard that they would also seek BSEC’s permission to inspect the other 13 companies, as well.
Operations of most of these 30 companies were shut down, while the remaining few have been found partially in operation.
Despite their poor fundamentals, prices of stocks of these ailing companies are often seen unusually and unreasonably high, owing to manipulation by vested quarters, which is a serious concern for market regulators.
The exchange is engaged in a continuous effort to clean its trading board through either bringing the non-performing companies back to the track, or a process of elimination of these companies.
The DSE officials have also been asking questions to the management of the ailing companies concerning their future plans to improve on their poor business performance.