The Bangladesh Securities and Exchange Commission issued a directive on Monday revising the criteria for companies to be listed in ‘Z’ category, which closely resembles the commission’s order issued on February 15.
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 failed to hold its annual general meeting within a stipulated timeframe as per relevant laws.
However, in the case of non-holding of AGM due to any writ petition or any legal process pending before court, maximum two years may be considered for such action.
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 BMRE or in the event of force majeure, it will be placed in the ‘Z’ category.
If negative balance of retained earnings exceeds its paid-up capital, the company will also be placed in the junk category.
The directive also said that no director or sponsor of a ‘Z’ category company, excluding bank, insurance company and non-bank financial institution, shall be allowed to transact any of his or her shares of that ‘Z’ category company on any platform or outside the stock exchanges without prior approval of the commission.
The BSEC also issued another notification on the day, directing the stock exchanges to allow ICB Securities Trading Company Limited to exercise ‘non-margin limit’ amounting Tk 50 crore.
The directive said that ISTCL or Investment Corporation of Bangladesh should provide an eligible guarantee or corporate guarantee to the stock exchanges in this regard.