Fortune Shoes' Tk10cr dividend disbursement remains overdue

Fortune Shoes Limited has failed to disburse dividends totalling around Tk10 crore for the fiscals 2021-22 and 2022-23 within the stipulated time, according to the company's auditor. 

In a qualified opinion published in the audited report for FY24 on the Dhaka Stock Exchange (DSE) today, the auditor revealed that the company declared a dividend of Tk5.89 crore for FY23, which remains unpaid as of the reporting date. 

For FY22, the company had declared a dividend of Tk16.25 crore, of which Tk12.11 crore has been disbursed, leaving an unpaid balance of Tk4.13 crore, the auditor noted. 

Although the outstanding dividend obligations do not impact the overall audit opinion, the auditor highlighted their significance. These unpaid amounts are recognised as liabilities in the company's financial statements. 

The company declared a 10% cash dividend and a 5% stock dividend for FY22, along with a proposed 5% cash dividend for FY23. However, due to the failure to disburse dividends on time, the DSE downgraded Fortune Shoes from the B category to the Z category on 25 September. 

Notably, the company submitted a dividend compliance report to the DSE on 9 June this year, claiming that the declared dividends for FY22 had been disbursed to shareholders' accounts. 

According to listing regulations, listed companies are required to disburse dividends within 30 days after approval at the annual general meeting (AGM). Failure to do so makes the directors jointly and separately liable to pay a penalty of Tk5,000 for each day the default continues. 

A senior company officer explained that a working capital shortage has prevented Fortune Shoes from disbursing dividends on time. 

According to the company's financial statements, it reported a profit of Tk37.41 crore in FY22 and a profit of Tk17.98 crore in FY23. 

Meanwhile, on 10 November, the capital market regulator set a deadline for ten listed firms to disburse their undisbursed dividends, warning that failure to comply would result in fines totalling Tk26.83 crore for the companies' directors. 

The companies include Safko Spinning Mills, Pacific Denims, Lub-rref (Bangladesh), Oryza Agro, Mamun Agro, Krishibid Seed, Krishibid Feed, BD Paints, Associated Oxygen, and Advent Pharma. However, the Bangladesh Securities and Exchange Commission (BSEC) did not include Fortune Shoes, despite its failure to pay dividends on time. 

At a commission meeting today, the BSEC directed nine firms to pay their due dividends by 15 December and set specific fines for non-compliance.

Advent Pharma, meanwhile, has been directed to disburse its due dividends by 30 November, with penalties for its directors in case of further delays, according to the BSEC.