The Dhaka Stock Exchange on Wednesday demoted Purabi General Insurance to ‘Z’ category due to its non-compliance with securities laws.
According to the DSE, the company was shifted to ‘Z’ category as the company failed to distribute declared dividend within the stipulated period as per BSEC conditions.
The Dhaka bourse barred broker houses and merchant banks from providing loan facilities to purchase securities of the company.
Over the past three weeks, the Dhaka bourse downgraded a total of 29 other listed companies to the ‘Z’ category.
Some of those companies distributed the dividends later and was promoted from the junk shares’ category.
The Bangladesh Securities and Exchange Commission on May 20 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 failed 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 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.