BSEC issues ultimatum to pay unallocated dividends to CMSF by June 10

The Bangladesh Securities and Exchange Commission (BSEC), the regulatory body, has directed the stock exchange-listed companies - which have cash and bonus shares in the form of undistributed dividends - to be deposited in the Capital Market Stabilisation Fund by June 10.

Otherwise, punitive measures will be taken against those companies, warned the BSEC.

In this regard, the BSEC on Sunday sent a letter to the managing directors of all listed companies.

At the same time, the BSEC informed the issue to the chairman of the Capital Market Stabilization Fund (CMSF), president of the Bangladesh Association of Publicly Listed Companies, chief of operations of the CMSF, managing directors of the Dhaka and Chittagong Stock Exchanges, Central Depository Bangladesh Limited and Investment Corporation of Bangladesh.

The BSEC has set up a CMSF of Tk 20,000 crore with undistributed cash and bonus dividends from listed companies and mutual funds to alleviate liquidity crisis in the capital market.

However, BSEC extended deadlines multiple times to the companies to submit the undistributed dividends to the CMSF. But some companies are yet to comply with the directive.

Therefore, the BSEC extended the deadline to June 10 and directed the companies to pay the unallocated dividends to CMSF.

If the unallocated dividends are not paid to CMSF within the fresh deadline, the BSEC will block those BO accounts.

And those BO accounts cannot be opened without the commission’s approval.

According to the letter, the commission already had sent more than one letter to the companies about the same issue.

As per the BSEC directive, the undistributed dividend was to be transferred to the CMSF by May 30.

But it was observed that some of the companies did not transfer the undistributed cash and bonus shares within the stipulated time as per the commission’s rules and regulations.

Failure to comply with this instruction will result in appropriate action being taken in accordance with the Securities Act.

The BSEC formulated the ‘Capital Market Stabilisation Fund Rules, 2021’ for the management of CMSF.

The rules were gazetted on June 27 in the year previous, with an 11-member board to manage it.

As of May 26, the CMSF has accumulated only Tk 798 crore, which is 9.15 percent of the total fund. But the deposit was supposed to be Tk 8,716.51 crore.