Vol. 4 Num 36 Wed. July 02, 2003  

Failure to pay dividend
SEC fines MDs of two cos

The Securities and Exchange Commission (SEC) yesterday penalised managing directors of two publicly traded companies for defaulting in dividend payment.

Gachihata Aquaculture Farms Limited has been fined Tk 1.5 crore while Raspit Data Management and Telecommunications Limited Tk 55 lakh for failing to pay dividends to their shareholders on time.

Both the chief executives have been directed to deposit the penalty amount within 30 days.

Gachihata Aquaculture

Gachihata Aquaculture declared 10 per cent dividend for general shareholders for financial year, which ended on June 30, 2002. As per the securities law, a company is given a 60-day period to complete disbursement of dividend amount.

But the company failed to pay within the stipulated time. Gachihata Aquaculture attributed the delay to legal problem as one of its sponsor shareholders appealed before a court and obtained an injunction, restricting the company to pay dividend.

The capital market regulators had served a show-cause notice on the managing director of the company asking him to explain why appropriate actions should not be taken against him for failure of his company to settle the dividend disbursement.

Raspit Data and Telecommunication Ltd

Raspit had declared a 10 per cent dividend for its shareholders in its annual general meeting on December 29, 2002 but failed to pay it within the stipulated 60-day time.

Earlier, the company in a written letter to the Dhaka Stock Exchange (DSE) submitted that it could not distributed dividend as one of the shareholders filed a case with the court of a district judge seeking more dividends.

The shareholder contended that the SEC had directed the Raspit management to deposit an Tk 80 lakh which SEC suspected the company has siphoned off in showing fictitious expenditure.

The SEC had also threatened to initiate legal action if the company refused in doing so. "You are also advised to rewrite the accounts of the company on the basis of actual expenditure," according to the letter to three directors of the company on January 9, 2003.

Based on the SEC directive, a shareholder of the company filed the case claiming more than the declared 10 per cent dividend.

Talking to The Daily Star, an SEC official said that they penalised the managing director of the company as the company failed to comply with dividend payment schedule.

The company in August 2000 raised Tk one crore through public subscription and another Tk one and a half crores through private placement arrangements.