BSEC imposes fines Tk29cr on directors of ten listed companies over unpaid dividends

The Bangladesh Securities and Exchange Commission (BSEC) has imposed fines totaling Tk29.09 crore on the managing directors and non-independent directors of 10 listed companies for failing to disburse declared cash dividends within stipulated statutory deadlines for the financial year 2021-22, alongside an isolated case from FY24.

According to a series of enforcement orders issued by BSEC, the regulatory actions stem from persistent non-compliance with the commission’s directives regarding timely dividend distribution and the separate maintenance of unpaid dividend accounts.

The regulator noted that the failure to clear dividend payments undermines investor confidence, disrupts market discipline, and constitutes statutory offenses under securities laws.

Lub-rref (Bangladesh) Limited faced the steepest individual penalty among the rulings, with each non-independent director and the managing director fined Tk2.35 crore for failing to distribute cash dividends declared for the year ended 30 June 2022.

BD Paints Limited received the second-highest penalty, with directors and the managing director penalised Tk97 lakh each for unfulfilled dividend obligations.

Oryza Agro Industries Limited and Safko Spinning Mills Limited faced penalties of Tk47 lakh and Tk20 lakh per director, respectively.

Meanwhile, directors of Associated Oxygen Limited were fined Tk1.91 crore each. Penalties for Mamun Agro Products Limited, Krishibid Seed Limited, and Pacific Denims Limited were set at Tk13 lakh, Tk10 lakh, and Tk13 lakh per director, respectively.

Advent Pharma Limited incurred a penalty of Tk4 lakh per director for similar non-compliance relating to FY22 dividends.

In a separate order involving a subsequent reporting cycle, directors and top executives of Genex Infosys PLC were fined Tk1 lakh each for delayed dividend disbursement and compliance reporting breaches concerning FY24.

In their defense during earlier hearings, representatives of several firms cited severe operational headwinds, including foreign exchange constraints and dollar shortages for opening letters of credit, severe liquidity squeezes, banking channel disruptions, and escalating raw material costs.

However, the commission rejected these explanations as unacceptable, emphasising that statutory investor entitlements remain mandatory.

Alongside the primary lump-sum fines, the commission has enforced a continuing daily penalty of Tk10,000 for each day of default where applicable, with all fines designated as personal liabilities to be settled within designated timeframes.