The Dhaka Stock Exchange on Monday downgraded four companies to ‘Z’ category due to non-compliance with securities laws.
The companies are Advent Pharma, Alif Manufacturing, SK Trims & Industries and ACME Pesticides.
The DSE in its website said that the companies did not disburse the approved dividend within the stipulated time frame.
Investors will not get a margin loan facility to purchase these shares, said the DSE.
The Bangladesh Securities and Exchange Commission, on May 20, 2024, issued a directive revising the criteria for companies to be listed in ‘Z’ category.
According to the directive, the stock exchanges will shift any listed company to the ‘Z’ category if it fails to declare any dividend for two consecutive years from the date of declaration of last dividend or the date of listing with the stock exchange.
The directive said that companies would be shifted to the ‘Z’ category if the issuer fails to hold its annual general meeting within a stipulated timeframe as per relevant laws.
Besides, if the issuer company is not in operation or production continuously for a period of minimum six months, excluding any such period for renovation or balancing, modernisation, rehabilitation and expansion or in the event of force majeure, it will be placed in the ‘Z’ category.
Force majeure is a clause in an agreement or contract whereby the non-performing party is exempted from any legal consequences if the non-performance of the contract is beyond the humans control to fulfil the contract, or to provide for uncertain events disrupting the execution of a contract.
If negative balance of retained earnings exceeds its paid-up capital, the company will also be placed in the junk category.
