BSEC to sue board of Shurwid Industries

The stock market regulator yesterday decided to file a case against the board of directors of Shurwid Industries Ltd for recommending dividends for fiscal 2018-19 in an attempt to manipulate its share prices.

The decision came in a commission meeting held at the securities exchange building in Dhaka chaired by Prof Shibli Rubayat Ul Islam, chairman of the Bangladesh Securities and Exchange Commission (BSEC).

The PVC product manufacturer announced 10 per cent cash dividend on November 3, 2019 for the year ending on June 30, 2019.

However, the company did not pay the dividend to shareholders, prompting the BSEC to form an investigation committee.

The committee found that Shurwid Industries Ltd recommended the dividend despite not having the capability to pay the money.

"The company announced the dividend to cheat people," said the BSEC in a press release yesterday.

So, the decision was taken to file a case against the then board of directors, it added.

The commission also approved an initial public offering of BD Thai Food & Beverage Limited to raise Tk 15 crore in funds from the stock market.

The company will issue 1.5 crore ordinary shares and the IPO proceeds will be utilised to purchase machineries, construct a building and develop land.

Its five years' weighted average earnings per share was Tk 0.63. The company's paid-up capital is Tk 66.5 crore.

Until the company's earnings per share goes over Tk 1, its directors and sponsors will not be allowed to get any dividend, said the BSEC.

The food and beverage maker is allowed to issue 15 per cent shares to its employees but their shares would not be allowed to be sold in the first two years.

The BSEC also allowed Union Bank Limited and Union Insurance Company Limited to issue 15 per cent shares for its employees.

These will also be locked for two years, the BSEC added.

Union Insurance Company Limited got the nod to raise Tk 19.6 crore in funds through an IPO.

Union Bank Limited got its IPO approval last month. The lender would raise Tk 428 crore, the largest amount by any bank in Bangladesh, by issuing 42.80 crore ordinary shares at a face value of Tk 10.