Adhering corporate governance guideline a must for issuing rights shares
Bangladesh Securities and Exchange Commission on Wednesday barred the listed companies from issuing dividends from surplus shown courtesy of asset revaluation.
The BSEC, in a separate directive, also made adhering to corporate governance guideline mandatory for the listed companies for issuing rights shares.The BSEC in a guideline on Wednesday tightened the asset revaluation rules for the listed companies barring upward revaluation of leased properties, second hand and lower economic life machineries, buildings with corrugated iron sheds, vehicles, furniture and loose tools.
The guideline said the valuer would be appointed by the board of directors mentioning the purpose of the valuation and the asset class.
It said the time difference for valuation of the same class of asset cannot be less than three years adding that no upward revaluation of any asset can be done within two years of acquisition.
The BSEC also barred the valuer company form entering into any agreement where the fee is depended on the outcome of the report. The valuer cannot accept data or analysis form the company without critical review, it added.
The valuer’s report should include the financial statement of the company, which is needed to be certified by the auditor, to make sure those comply with the relevant laws and accounting standard.
The auditor also has to certify that the provisioning of tax and other liabilities have been considered during the valuation.
The BSEC moves come after most of the listed companies failed to comply with the corporate governance guideline recently.
The BSEC in April issued show-cause notices to 192 listed companies as those had failed to fulfil the conditions, including rules regarding the size of the board of directors, appointment of independent directors and constitution of audit committee, as per corporate governance guideline.
Among the 320 listed companies, as many as 101 completely failed to implement the conditions, said the commission.
A total of 91 companies complied with the rule partially while there were 128 who complied with the guideline fully.
According to the guideline, a board of directors should have a minimum of 5 and a maximum of 20 members.
It said one-fifth of the board of directors must be independent directors while earlier the ration was set at one-tenth.
The BSEC also asked the listed companies to
redesign the audit committees where all the members had to be ‘financially literate’.
-With New Age input
