A total of 12 listed companies have moved out from the “Z category” to their respectively previous “A” and “B” category in the country’s stock exchanges, as directed by the Bangladesh Securities and Exchange Commission (BSEC).
AS per BSEC direction, these companies will return to their previous category from Wednesday.
The newly-reinstated companies in “A” category are: AB Bank, Fu Wang Ceramic, Prime Insurance, Renwick Jajneswar, Heidelberg Cement and LibraI Infusion.
Meanwhile, companies reinstated to “B” category are: BD Thai, Appollo Ispat, Safco Spinning, Zaheen Tex, Khan Brothers PP Woven and Salvo Chemical.
Earlier, the stock market regulator on Tuesday ordered trading settlements for the companies in the junk stocks or ‘Z’ category that would be T+3 instead of T+9 at stock exchanges from Wednesday.
According to the new order, the trading settlement period of Z category companies to four days (T+3) from existing ten days (T+9).
The securities regulator also ordered that the shares of a company will be traded under Z category if it fails to distribute cash dividend or hold AGM in two years.
A company will be transferred to the Z category if its production remains closed for six months or more.
The BSEC said that a company having net operating loss or negative cash flow from operations for two consecutive years would also be transferred into the Z category. A listed company will also be transferred into the Z category if its negative retained earnings exceed its paid-up capital.
It also said it would issue a new notification based on which stock exchanges would amend their respective regulations to treat and handle Z category companies.
The new order also states that sponsors and directors holding shares of Z category companies will not be able to sell, transfer, hand over or pledge them.
Companies remaining in the Z category for two years will have to reform their existing board of directors within the next 45 working days.
If they fail to do so, those sponsors and directors will not remain as directors in those companies or in any other listed companies and capital market intermediaries, the BSEC ruled.
In such case, the stock market regulator will appoint special auditors and observers to ensure compliance and good governance.
After the reformed board is put in place, if they too fail to improve the business within four consecutive years, then the stock exchanges will de-list the companies.
