Non performing companies are in demand list; experts sense gambling

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Non performing companies are in demand list; experts sense gambling

Script price of two dozen non-performing companies are gaining abnormally to the capital market giving a signal that the present demand created in the market is artificial, market analyst said.

Companies which are sound in basics and perform brilliantly are not getting much response from the Corona-hit market rather Z category shares which have no chance to give return to its share holders received huge responses.

“It seems a section of unscrupulous people are active and they are making money by luring general people to poor performing company,” Azizul Islam a share trader said.

The Bangladesh Securities and Exchange Commission (BSEC) earlier had directed 14 listed companies to comply with the necessary laws in the interest of investors before delisting.

The DSE management also wanted delists those companies as most of their operations remain closed.

The companies are Shampur Sugar Mills, Jilbangla Sugar Mills, Beximco Synthetics, Shinepukur Ceramics, Sonargaon Textile, C&A Textile, Tung-High Knitting and Dyeing, Dulamia Cotton, Inda Cotton, Samata Leather Complex Industries, Imam Button Industries and Savar Refractories Limited.

Earlier on September 3, 2019 the BSE had sought a legal explanation on the grounds on which the DSE wanted to delist 14 companies. Then on September 15, DSE replied to the letter. Based on DSE’s response, BSEC has given the above instructions.

The BSEC says that according to the terms of the listing application, if there is any inconsistency or deficiency in the companies or any violation of any law, then the interest of the general investor should be given priority. But the DSE did not take any action against the companies and their directors under Section 9 (4) of the Securities and Exchange Ordinance 1989.

In case of deviation from the listing agreement made at the time of listing of the companies, action should be taken against the managing director or CEO of the company or any nominee in accordance with section 7 of the “Stock Exchange Listing Regulation 2015”. However, the DSE has failed to take action.

According to Section 51 (2) of the DSE Listing Regulations, if a company ceases operations in lieu of trade suspension, the stock exchange will monitor the overall condition of that company for 6 months. However, DSE has not complied with the law against the companies.

The BSEC further said that among the 14 companies, DSE has mentioned that there is a going concern or future threat. However, the rest of the company did not comply with the law DSE. It also appears to BSEC that there are legal deficiencies in the listing agreements made with stock exchanges and issuers. As a result, the stock exchange cannot take any action against the issuing company even after violating the terms of the listing agreement.

 

Bmirrorhttps://bmirror.net/
businessmirror20@gmail.com

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