BM Desk: The Bangladesh Securities and Exchange Commission (BSEC) has once again requested that 60 listed businesses provide a plan for fulfilling their minimum paid-up capital requirements in an attempt to promote openness and sound governance in the stock market.

Ahead of the Eid-ul-Azha holidays, BSEC addressed letters to the companies informing them that fulfilling this condition is necessary in order to be listed on the stock exchange’s main board.

A firm must have a minimum paid-up capital of Tk 300 million in order to be listed on the main board of the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE), per their listing regulations. Failure to comply with this obligation is seen by the regulating authority as a blatant violation of the Securities Act.

Additionally, BSEC had already mandated that these businesses raise their paid-up capital. However, the majority did not comply. This time, though, the business is adamant about fulfilling the listing requirements. It has been learned that those who do not fulfill the requirements within the allotted period may be moved from the main board to the Alternative Trading Board (ATB) or SME platform.
A commission official responded, “We do not wish to see any firm with little paid-up capital in the stock market,” when asked about the BSEC’s most recent position on the matter. because it damages the market’s repute.”

The commission has clarified that issuing stock dividends is not a valid method for fulfilling capital requirements, as it merely increases the number of shares without enhancing the actual capital. The BSEC is urging companies to generate real funds to bolster their financial foundation.

In December 2021, the regulator requested 64 companies to present plans to satisfy their minimum paid-up capital requirements to qualify for listing on the main board of the stock exchange. That year, the commission established a committee to assess the overall status of these firms and to devise a strategy for improving the financial performance of companies with insufficient paid-up capital. The companies were instructed to submit their plan reports to the commission within 30 days of receiving the notification.

At present, 11 of these companies have a paid-up capital of less than Tk 5 crore, 15 companies have a paid-up capital of under Tk 10 crore, 21 companies possess a capital of less than Tk 20 crore, and the remaining companies have a capital of less than Tk 30 crore.

Despite challenges, some companies’ share prices have risen unexpectedly, raising concerns among investors and market analysts. Entrepreneurs and directors may be hesitant to increase their paid-up capital.