Lafarge Surma Cement, which recently declared interim dividend, will remain at the junk Z category until it declares and disburses final dividend after the end of the year 2014, an official of the Dhaka Stock Exchange told New Age on Thursday.
He said that the Bangladesh Securities and Exchange Commission on Wednesday evening asked bourse to follow the existing regulations in categorising Lafarge following the its declaration of 5 per cent interim dividend.
The prime bourse recently requested the BSEC to clarify in what category the Lafarge, which is now under Z category, will be placed after the declaration and disbursement of the dividend.
‘As per the existing settlement regulations the category of any company will be upgraded after it declares dividend based on the financial performance of a full year. So there is no chance to upgrade Lafarge’s status following its interim dividend declaration based on the company’s performance for five months,’ said the DSE official.
Lafarge, which has been under Z category for years for its failure to declare any dividend because of losses, on June 10 declared 5 per cent interim dividend for 2014 based on the earnings of first five months of the year. The company became profitable this year.
According to the rules, any company declaring 10 per cent or more dividend is placed under top-class A category, the company declaring dividend between 5 per cent and below 10 per
cent is placed under B category while any company failing to declare any dividend or hold regular annual general meeting is placed under Z category.
Any new company placed under N category after listing and remains at the category till the holding of AGM.
As per the DSE’s Settlement Regulations- 2013, shares of any company will not be degraded to ‘Z’ category if the company declares dividend for its shareholders based on the last calendar year’s financial report, a DSE official told New Age earlier.
The regulations also stipulates that ‘G’, ‘N’ and ‘Z’ category companies will be upgraded to the ‘A’ or ‘B’ category considering their dividend declaration and compliance with other regulations, the official said.
The regulations, however, did not mention anything about category change of a company that will declare interim dividends for its shareholders based on un-audited financial statement, the official said.
He also said that the bourse sought clarification from the regulator as there is a perception among the investors that Lafarge Surma Cement will be upgraded to ‘B’ category after the declaration and disbursement of the dividend.
Asked, a BSEC official on Tuesday said that as per the existing regulations there is no scope to allow any company to upgrade from ‘Z’ category based on its interim dividend.
-With New Age input
