CMSF deposits remain sparse despite BSEC warning

Despite the regulatory body’s repeated calls, listed companies mostly remain unresponsive in depositing unclaimed dividends in the Capital Market Stabilization Fund (CMSF).

Even warnings of stiff penalties have failed to faze the companies and only a meagre amount than expected has so far been deposited in the fund.

As a result, the fund’s Audit and Accounts Management Committee (AAMC) and the Bangladesh Securities and Exchange Commission (BSEC) have expressed displeasure with the companies.

According to the instructions given by the BSEC, the deadline was July 31 for companies and mutual funds to deposit undistributed dividends companies to CMSF.

However, till August this year, Tk 480 crore has come as cash dividend to the CMSF and Tk 660 crore as bonus dividend.

As such, a total of Tk 1,140 crore has been deposited in CMSF in respect of cash and bonus dividends. Out of this, a bonus dividend of four crore shares has been determined based on the current market price.

Meanwhile, out of Tk 1,140 crore, Tk 225 crore has been provided to the Investment Corporation of Bangladesh (ICB) to increase liquidity flow in the capital market and Tk 50 crore has been allocated for the Golden Jubilee Mutual Fund.

Settling the claims of the investors is one of the main responsibilities of this CMSF. About 80 percent of undistributed or unclaimed dividend claims have been settled since the inception of the fund.

Meanwhile, the BSEC has sought an explanation from the companies that have not remitted their dividends to the CMSF within a stipulated time frame.

At the same time, CMSF has been tasked to collect the explanations from the companies and submit the summary report along with necessary documents to the commission.

Also, the amount of cash dividend is yet to be identified and CMSF has been directed to split the cash and bonus dividend separately.

Recently a letter in this regard has been sent to the Chief of Operations (COO) of CMSF.

In this regard, Md Rezaul Karim, Executive Director and Spokesperson of BSEC, said it has been directed to collect explanations from non-compliant companies regarding the non-transfer of undistributed or unclaimed cash and bonus dividends to CMSF within the prescribed time frame.

Also, the CMSF has been directed to prepare a report summarizing the explanation of each company with all relevant documents and identifying the amount of undisclosed cash dividend, he added.

Meanwhile, the CMSF has written to the companies which have not yet deposited the undistributed or unclaimed dividends retained with them, soon after receiving the BSEC’s letter.

Some companies have already provided explanations in response to the letter. However, some companies are yet to respond and some also said they would respond to the letter soon.

Chief of Operations of CMSF and General Manager (GM) of Agrani Bank, Manowar Hossain said, the explanations provided by those companies will be compiled and sent to BSEC in the form of a report along with necessary documents.

“We are working on it. The CMSF will play an important role in the development of the capital market and in the interest of investors,” he added.

On August 22 of last year, BSEC approved an 11-member governing board for the CMSF for a three-year term in order to solve the liquidity crisis and the development of the capital market.

Nojibur Rahman, former principal secretary of the Prime Minister’s Office and former chairman of the National Board of Revenue (NBR), has been assigned as the chairman of the fund.