Six firms downgraded to Z for not holding AGMs on time

The Dhaka and Chittagong bourses have downgraded six firms to the Z category due to their failure to hold annual general meetings (AGMs) within the stipulated time.

On their websites, the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) mentioned that the measures have been taken in accordance with an order issued by the Bangladesh Securities and Exchange Commission (BSEC) on 15 February.

The exchanges also stated that their decision will be effective today and requested that brokerage houses and merchant banks to abstain from providing loan facilities for purchasing these stocks.

The newly downgraded companies are Prime Textile Spinning Mills, Prime Finance & Investment, New Line Clothings, Fareast Islami Life Insurance, AFC Agro Biotech, and Active Fine Chemicals, as stated by the bourses.

New Line Clothings and Fareast Islami Life Insurance were staying in the A category, while the others were in the B category.

With these six additions, the total number of Z category companies now stands at 55.

In its 15 February order, the capital market regulator imposed some conditions regarding the transfer of non-compliant companies to the Z category.

Earlier, on 18 February, the DSE downgraded 22 more companies to the "Z" category due to the negative balance of retained earnings exceeding its paid-up capital.

These companies previously existed in different categories, including the A and B categories, which misrepresented their financial status to investors.

According to information from the DSE, despite the conclusion of 2022, the non-banking financial institution Prime Finance and Investment failed to declare the holding of an AGM and corporate declarations for 2022.

Previously, it had announced plans to hold the AGM for 2021, which was scheduled for 10 September via a digital platform. Although the year 2023 ended two months ago, the company failed to disclose any financial data to investors.

New Line Clothings, which was listed in 2019, has also failed to hold AGMs for the past two fiscal years. Additionally, although the textile firm published its financials for the nine months from July to September of the fiscal 2021-2022, there has been no declaration regarding AGMs or corporate earnings for the preceding year.

Furthermore, despite the end of the fiscal 2022-23, there has been no corporate disclosure regarding its financials.

Prime Textile held its AGM for FY22 last. However, despite the end of FY23, it failed to hold a board of directors meeting for corporate declaration and to declare the date of the AGM.

There is no data available on the DSE's website regarding Fareast Islami Insurance Company's AGM. On 14 August 2022, its board decided to sell three properties to pay policyholders' claims.

AFC Agro Biotech lastly paid a 50% cash dividend to its shareholders in FY22. However, despite the end of FY23 eight months ago, it failed to hold an AGM and also neglected to declare annual corporate earnings.

Active Fine Chemicals is facing a similar situation to AFC Agro Biotech. Although FY23 has ended, it failed to hold an AGM.