4 sick listed companies must submit return plans
Worried about their bad business and inefficient operational status, the Bangladesh Securities and Exchange Commission (BSEC) has asked four listed companies to immediately submit their comeback plans.
Jute Spinners and RSRM Steel are no longer in production, while production at Aziz Pipes and Central Pharma is suspended from time to time.
None of the four companies were able to pay dividends due to losses in fiscal year 2020-21.
With the exception of Jute Spinners, the boards of directors of other companies do not own the 30% share required by the securities regulator.
BSEC spokesperson and executive director Rezaul Karim told The Business Standard that the commission regularly holds meetings with weak and loss-making listed companies.
“Discussions are underway on what to do to change their situation. In this context, the four companies have been invited to submit in writing their plans to improve the situation,” he added.
Company officials have said that they are also keen to do good business and how this can be done is planned in consultation with the directors of their companies.
The plans will be submitted to the commission in due course, they added.
Of these four companies, Jute Spinners is in the most vulnerable situation. With paid-in capital of only Tk 1.70 crore, the company has not been in production for a long time. The last time it paid dividends to its shareholders was in 2012.
However, each share of the company is traded at 120.70 Tk on the Dhaka Stock Exchange (DSE) where the face value is 10 Tk. Its stocks are often manipulated due to its low cap status.
There is a good demand for Aziz pipes in the plastic pipe and fittings market. But right now, the business is in disarray due to delinquent loans, insufficient working capital and negligence on the part of its owners. However, its competitors National Polymer and RFL, which started their activity much later, are doing well.
Still, its shares are trading at 100 Tk on the DSE. And the price of these stocks is increased by rumors and manipulation.
Central Pharma stopped production in 2020 following its license suspension by the General Directorate of Medicines Administration. But, a lack of expertise of its leaders in the pharmaceutical field is at the origin of the collapse of the company.
RSRM, one of the country’s largest steel producers, is plagued with bad debts. In addition, the factory was closed due to electricity and gas bills.
According to the auditor, the company will have to repay Tk 94 crore to regularize the bank loan. But she was unable to raise the funds even though the payment deadline was June 30, 2021. In addition, her business expansion plan has been closed for more than two years.