BSEC to appoint two independent directors to Union Capital

The Bangladesh Securities and Exchange Commission (BSEC) will appoint two independent directors to Union Capital Ltd to ensure corporate governance.

BSEC sources said the two independent directors are professors in the Economics and Finance departments at the University of Dhaka.

Union capital failed to pay dividends to its shareholders for the 2019 financial year as it did not make a profit that year.

As a result, the company was placed in the "Z" category from "B" category.

Per the new regulations of "Z" category, the securities regulator contacted the company to inquire about its business situation.

Company officials explained their position to the commission and discussed the measures taken to improve business.

After a constructive discussion, the regulator decided to change the category of the company.

As per rules, the company will return to the "B" category from "Z", as it paid 5% stock dividend for the 2018 financial year.

But the commission observed that the company had not complied with the corporate governance code and also did not submit the financial report on time.

Therefore, the commission has decided to appoint independent directors to the company as observers.

Union Capital posted a net loss of Tk105 crore last year. Its reserve is Tk48 crore negative.

This losing trend continued in the first half of this year. During this period, it posted a net loss of Tk24 crore.

The company was listed on Dhaka Stock Exchange (DSE) in 2007. Its paid-up capital is Tk172.57 crore.

Of the company's total shares, sponsors and directors hold 36.12%, institutional investors have 21.18%, and general investors own 42.70%.

As of Wednesday, the closing price of the company's shares at the DSE was Tk8.10 each.