Listed SME firms accused of dividend deception

Listed companies on the stock exchange's SME platform are not properly paying dividends to their investors, according to complaints lodged with the Bangladesh Securities and Exchange Commission (BSEC).

In the complaints, a good number of investors claim that SME companies listed on both stock exchanges declare dividends, but they do not disburse them accordingly. Despite this, these companies submit reports to the stock exchange claiming that they have completed the disbursement of the declared dividends, say the investors. 

As a result, investors are losing interest in the SME market, they say. The investors also claim that SME investors face various forms of discrimination. 

Currently, 20 SME companies are listed on the platform.

Muhammad Harunur Rashid, an investor in the capital market, has complained that he has been waiting to receive dividends from the listed company Krishibid Feed Limited. He has not received any dividends for the last two years. In his complaint letter to the BSEC, he urged the regulator to take action against companies that fail to properly disburse their declared dividends.

Similarly, Meshahul Kobir Chowdhury also complained about not receiving dividends from Krishibid Feed Limited. He claimed that although the company reported disbursing dividends, he has not received them yet. He tried to contact the company but was unsuccessful.

Syed Mahbub Ahmed has also complained about BD Paints for not receiving the dividend for June 2023. He told The Business Standard that he has invested in many companies across both platforms with the expectation of receiving dividends. However, he did not receive any dividends from BD Paints, prompting him to file a complaint with the regulator.  

A senior official of Krishibid Feed told TBS that they are gradually paying the dividends.

BSEC officials, speaking on condition of anonymity, have acknowledged receiving such complaints. They noted that many companies have declared dividends but failed to properly disburse them. The commission is in the process of taking enforcement action against these companies. 

Additionally, the commission has instructed the stock exchanges to submit reports on companies that have not disbursed dividends on time, they said.

According to the law, companies are required to submit a disbursement report to the stock exchange after they have fully and properly disbursed dividends. However, some firms have disbursed only 60% or 70% of the dividends but falsely reported to the stock exchange that they have disbursed 100%, thereby deceiving investors. 

Stock market analyst Abu Ahmed said many non-functional and poorly performing companies have been listed on the SME platform which are not capable of paying dividends. "The regulator should take action against this."

The BSEC officials said they have received complaints against Oryza Agro Industries, Mostafa Metal Industries, Mamun Agro Products, Master Feed Agrotec, Achia Sea Foods, Krishibid Seed, Krishibid Feed, BD Paints and Apex Weaving and Finishing Mills Ltd over not paying dividends properly. 

Some listed company officials, seeking anonymity, said they try to pay dividends properly. But many investors did not update the information in their portfolios and banks also take time to send dividends, they said.