B Mirror Report: The Bangladesh Securities and Exchange Commission (BSEC) has decided to take punitive action against listed companies that fail to deposit the full amount of declared cash dividends into designated separate bank accounts within the stipulated timeframe.

The regulator will also tighten requirements for obtaining bank certificates and presenting them at annual general meetings (AGMs) before dividend proposals can be placed before shareholders.

The decisions were taken at the BSEC’s 1,033rd commission meeting held on Tuesday, according to a press release signed by Executive Director and spokesperson Md Abul Kalam. The meeting was chaired by BSEC Chairman Masud Khan.

Under existing regulations, listed companies must transfer the full amount of their declared annual or final cash dividends to a separate bank account at least one day before the AGM. Companies are also required to collect a certificate from the concerned bank confirming the transfer.

The bank certificate must be authenticated by the company’s managing director, chief financial officer and company secretary. It must subsequently be presented at the AGM and submitted to the relevant stock exchange.

However, the commission recently found that several companies had failed to comply properly with these requirements. In response, the BSEC decided to take punitive measures against the companies concerned in accordance with applicable securities laws and regulations.

The commission has also decided to amend the existing directives to strengthen compliance in dividend distribution.

Under the revised requirements, depositing the full declared dividend amount in a separate bank account, obtaining the bank certificate and presenting it at the AGM will become prerequisites for placing dividend proposals before shareholders.

As a result, listed companies will not be allowed to present dividend-related proposals at their AGMs without fulfilling these conditions.

The move aims to ensure that companies have secured the funds necessary for dividend payments and to strengthen accountability in the distribution process.

Cash dividends are an important source of returns for stock market investors. The BSEC’s decision is expected to strengthen regulatory oversight and improve compliance with dividend distribution requirements among listed companies.