Bangladesh Securities and Exchange Commission on Monday issued a show cause notice to Familytex (BD) as the company violated listing condition by taking a decision on dividend declaration before listing.
‘The commission on the day issued a show cause notice to Familytex and it also asked the company to reply within three working days,’ BSEC executive director Saifur Rahman told New Age.
The company violated a clause of the listing consent of the BSEC that bars any firm from issuing or declaring any dividend for its shareholders before the completion of listing with the bourse after the regulator approves its initial public offering, said BSEC officials.
The BSEC approved Familytex’s IPO on January 22 but its board of directors had decided not to issue any dividend for the shareholder for the year ended on April 29, before its listing with the Dhaka Stock Exchange on June 18, they said.
The company, however, on the day of listing on June 18 in a notice posted on the DSE web site claimed that it had declared no dividend in accordance with the listing condition set by the BSEC.
The DSE on Sunday
placed the shares of Familytex under ‘Z’ category from ‘N’ category only one and a half months after its listing because of the company’s failure to declare any dividend.
Familytex raised Tk 34 crore by offloading 3.40 crore shares at an issue price of Tk 10 per shares.
As a newly-listed scrip, the trading of the company’s shares started under ‘N’ category.
‘Before approving IPO of a company the capital market regulator should verify properly that the company will be able to issue some dividends to its shareholders,’ former BSEC chairman Faruk Ahmed Siddiqi told New Age on Sunday.
According to the financial statement of the company as on December 30, 2011, the earning per share of the company was Tk 0.92 while net asset value was Tk 11.82.
As per the half-yearly report of the company published on July 31, the company reported net profit after tax of Tk 45.35 crore with an EPS of Tk 4.13.
The paid up-capital of the company was Tk 6 crore in 2010, which was increased to Tk 105 crore before it applied for IPO.
The company made corrections in its prospectus five times after submitting it to the BSEC.
Familytex issued placement shares of Tk 21.50 crore before it got approval for offloading shares in the capital market through IPO.
-With New Age input
