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DSE warns defaulting listed firms

SM Golam Samdani |
Update: 2010-09-07 01:24:28
DSE warns defaulting listed firms

DHAKA: Dhaka Stock Exchange has warned nine listed companies of hefty fines and unspecified action after the firms failed to pay annual listing fees for years, officials said Tuesday.

The nine companies owe the country’s premier bourse 1.48 million taka in unpaid fees and accumulated penalties for not clearing the listing charges in time for up to seven years.

Fed-up with the companies foot-dragging, last week the bourse asked the defaulters to clear up the dues as “soon as possible”, warning that any further delay could lead to more fines and actions.

In the letter the DSE president Shakil Rizvi did not specify the actions, but he told banglanews that the defaulting firms have set bad example in the market.
 
“They are strong enough financially and should clear up their dues immediately,” he said.    
 
Under the listing rules, the DSE can de-list a company from the 40 billion dollar fast-booming capital market if it fails to pay fees, fines and other penalties in time.

“But we don’t usually take stern action against the defaulters, as it would eventually affect the companies’ share holders,” said Rizvi.
     
According to the listing rules, a company must pay annual fee of 10,000 taka if its paid-up capital is 10 million taka, 40,000 taka for a paid-up of 100 million taka, 75,000 for 500 million taka and

100,000 if the paid-up capital is one billion taka.

Among the defaulters, Alhajj Textile, Samata Leather, Legacy Footwear and Federal Insurance Ltd did not pay fees and fines for the last two years.

Fine Food Ltd has been a defaulter for four years while Kashem Silk and Therapeutics for five years. State-owned BD Welding didn’t pay fees for six years and Chittagong Vegetable for the last

seven years.

The DSE law says the companies have to pay their annual fee by March 31 every year. If a company fails to make the payment before the deadline, the DSE slaps 1.5 percent surcharge on the unpaid fees.
 
Shamsul Alam Shamim, chairman of top defaulter, Chittagong Vegetable, told banglanews that poor financial position caused the delay.

“We failed to pay the fees and fines timely because we have been making losses for the last few years. We will clear up the dues as soon as our financial position improves,” he said.

A total of 456 companies, mutual funds and debentures are listed with the DSE.  

BDST: 1726 HRS. SEP 7, 2010

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