Stocks
BSEC Faces Complaints Over SME Platform Bias
A group of general investors has raised concerns with the Bangladesh Securities and Exchange Commission (BSEC) and stock exchanges, alleging unfair treatment after investing in the SME platforms. On Tuesday, the investors submitted a list of 13 demands to regulators, seeking to address what they perceive as disparities within the SME market, where 20 companies are currently listed.
One of the primary concerns highlighted by the investors is the disparity in the circuit breaker limits between SME stocks and the main market. They argue that the circuit breakers should be harmonized to ensure a level playing field. Additionally, the investors have called for the removal of the Tk30 lakh minimum investment requirement, advocating for equal access to SME shares for all investors.
The group also proposed stricter penalties for companies that fail to distribute dividends promptly and suggested replacing the leadership of firms that do not adhere to BSEC regulations. They believe that SME companies with paid-up capital equivalent to main market companies, or those that are fully compliant with regulations, should be permitted to trade on the main market. Moreover, firms that have consistently provided a 10% cash dividend for three consecutive years should also qualify for main market trading.
Another significant demand from the investors is that brokerage houses and merchant banks offer loan facilities for SME shares, similar to those available for main market shares. They also recommend that companies transitioning from the Over-The-Counter (OTC) market to the SME platform, and meeting compliance standards, should be eligible for trading on the main market.
Furthermore, the investors propose that SME companies be required to submit financial reports either quarterly or semi-annually. They also suggest allowing companies with lower capital to increase it under specific conditions, while shares created or increased through private placement should not be listed on the SME market.
According to market insiders, the stock regulator had previously relaxed certain rules to attract companies to the SME platforms, even though some were initially deemed unsuitable. Although these companies have started declaring dividends post-listing, some investors claim they have not received the promised payouts.
There are also allegations that some of these companies are submitting inaccurate reports to the stock exchange, falsely indicating that dividends have been paid, which has further eroded investor confidence in the SME market.
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
The Bangladesh Securities and Exchange Commission (BSEC) has removed three audit firms from its panel for their failure to secure enlistment with the Financial Reporting Council (FRC), according to a notice issued today.
The firms—A Hoque & Company, FAMES & R, and SK Barua & Company Chartered Accountants—were delisted following the FRC’s request. In December last year, the FRC published a list of enlisted audit firms and subsequently, in February, requested the BSEC to remove any firms that were not included on that list.
BSEC regulations mandate that financial statements signed by auditors outside its approved panel will not be accepted. With the removal of these three firms, the total number of audit firms on the BSEC panel has been reduced from 48 to 45.
Sources from the FRC revealed that 15-20 audit firms failed to secure enlistment last year, and approximately 45 chartered accountants are currently under restrictions imposed by the Institute of Chartered Accountants.
Although the delisted firms can no longer audit issuer companies or listed securities, they are allowed to complete audit and assurance services that were initiated before their removal, the BSEC clarified.
