The Bangladesh Securities and Exchange Commission (BSEC) has fined 50 directors and officials of 10 listed companies a total of Tk 29.23 crore for failing to distribute dividends to investors within the stipulated timeframe.

The penalties were imposed through an order signed by BSEC Commissioner Nahid Mahtab on November 4. Certified copies of the order were sent to the concerned companies on November 8.

Lub-ref (Bangladesh) Ltd’s six directors received the highest penalty, with each fined Tk 2.35 crore, bringing the total to Tk 14.10 crore. The four directors of Associated Oxygen were fined Tk 1.91 crore each, totalling Tk 7.64 crore, while three directors of BD Paints were fined Tk 97 lakh each, amounting to Tk 2.91 crore.

The four directors of Oriza Agro Industries were fined Tk 47 lakh each, totalling Tk 1.88 crore. Seven directors of Krishibid Seed were fined Tk 10 lakh each, while three directors of Safko Spinning Mills were fined Tk 20 lakh each.

The four directors of Pacific Denims and Mamun Agro Products were fined Tk 13 lakh each. Seven directors of Advent Pharma were fined Tk 4 lakh each, while eight directors and officials of Genex Infosys were fined Tk 1 lakh each. Oracle Services PLC, a corporate director of Genex, was also among those penalised.

According to the BSEC order, nine companies failed to distribute cash dividends declared for the financial year ended June 30, 2022, within the prescribed period. Under commission rules, companies must deposit an amount equivalent to the declared dividend in a separate bank account within 10 days of the announcement and distribute it to shareholders within 30 days of approval at the annual general meeting (AGM).

The commission considers failure to comply with these requirements a clear violation of securities laws and an act detrimental to the integrity of the capital market.

The order cited violations of Regulation 47 of the Depository (User) Regulations, 2003, a directive issued on January 14, 2021, and Regulation 28(1) of the Dhaka Stock Exchange (DSE) Listing Regulations, 2015. In some cases, violations of Sections 18 and 11(2) of the Securities and Exchange Ordinance, 1969, were also identified.

Associated Oxygen, BD Paints and Mamun Agro Products were asked to explain their positions under Section 11(2) of the ordinance on June 18, 2023, but did not respond. Safko Spinning, Oriza Agro and Lub-ref failed to submit dividend distribution compliance reports, while Advent Pharma and Krishibid Seed submitted reports but did not fully comply with the commission’s directives.

The BSEC’s enforcement department issued show-cause notices to nine companies on April 24, 2024. Hearings were held between May and July that year. The companies cited dollar shortages, liquidity constraints, complications in opening letters of credit (LCs), rising raw material costs and limitations in the banking sector. The commission, however, found these explanations unacceptable.

At its 930th meeting on November 7, 2024, the commission directed the companies to pay the outstanding dividends by December 15, warning that directors other than independent directors would face penalties if they failed to comply. A similar decision was taken for Advent Pharma at the commission’s 929th meeting on October 31, 2024, with a November 30 deadline. The penalties followed their failure to meet the deadlines.

During the hearings, Associated Oxygen said it had paid Tk 5.24 crore of its declared dividend of Tk 6.49 crore, leaving Tk 1.25 crore unpaid. Oriza Agro claimed it had distributed around Tk 2.81 crore of its declared dividend of Tk 3.24 crore.

Krishibid Seed said it had paid 98.8% of its dividend, while the remaining 1.2% could not be distributed because the heirs of some deceased shareholders had failed to provide the required documents. Pacific Denims said it had distributed 11,358 of 11,806 dividend warrants through banking channels, while the remaining 448 were issued offline.

Lub-ref said it had to use funds reserved for dividend payments to meet daily expenses after raw material imports came to a halt, despite having unutilised IPO proceeds.

Genex Infosys was penalised over a separate dividend default. The company had declared a 3% cash dividend for the financial year ended June 30, 2024, which was due by January 29, 2025. It also failed to submit the required compliance report within the deadline.

The BSEC issued show-cause notices to Genex on November 18 and December 8, 2025. At the hearing, the company cited liquidity problems caused by a lack of cooperation from its principal banking partner and delays in collecting institutional receivables. It claimed that all dividends had subsequently been paid in September 2025 and that the compliance report was submitted on September 25. The commission rejected the explanation.

The penalties in the Genex case cover members of the board during the period concerned, the then chief financial officer and company secretary, and the current acting managing director.

For the other nine companies, each director concerned will face an additional fine of Tk 10,000 per day if the failure to pay the penalties continues. The amount will be treated as a personal liability of the directors.

Genex has been instructed to deposit its penalty within 30 days of the order through a bank draft or pay order in favour of the Bangladesh Securities and Exchange Commission. Failure to pay within the deadline may lead to further action under securities laws.